Crypto Market : Will Bitcoin Crash Before A Bull Run ?

The calm periods in the bitcoin market are often deceptive. Indeed, when volatility collapses, it gives way to brutal amplitude movements, capable of surprising both seasoned investors and short-term speculators. Today, several technical indicators suggest a scenario similar to that of August 2023: a temporary drop in BTC before a major rebound that could bring it up to $85,000. An analysis conducted by CryptoQuant reveals that current market conditions resemble a past configuration where prolonged stagnation led to massive liquidation of positions before paving the way for a strong bullish trend.

A market waiting for clear direction

The current evolution of bitcoin is marked by a lasting lateralization, characterized by reduced volatility and a lack of outright trend. Thus, the choppiness index, an indicator that measures the level of indecision in the markets, shows high levels on daily and weekly charts. According to analyst Percival from CryptoQuant, this situation indicates that the market is at a crossroads and a sharp movement is imminent. “Our Choppiness Index is unstable (62 and 72 respectively), which means it must inevitably enter a trend, suggesting a more aggressive movement in one direction or another.”

Last year, a similar configuration preceded a correction move before a bullish recovery. In August 2023, volatility had surged violently, sweeping away traders’ leveraged positions before allowing for a prolonged increase in BTC’s price. Once again, the gaps between the highs and lows of the consolidation range reach 16 %, a signal that reinforces the possibility of an impending acceleration phase.

A jump to $85,000 before a new rally?

If the hypothesis of a false bearish breakout materializes, two technical levels are particularly monitored by observers. The first key threshold is at $92,000, corresponding to the average cost of short-term holders (STH). This level has historically served as support in past bullish cycles. However, in case of a breach, the next stabilization zone would be around $85,000, an area where the 200-day exponential moving average (EMA) could offer a bounce point.

According to Percival, the market could seek to liquidate speculative positions before a new bullish phase. “The possibility of deceptive movements before the bull run is high. Many traders are positioned in these areas, and the market has a tendency to liquidate these positions before returning to its expected course,” says Percival in a post on February 17, 2025. A classic maneuver by markets that tends to trap overly impatient investors, before propelling BTC to new heights.

Despite these correction prospects, the underlying signals remain largely bullish. The structure of the Bitcoin market has never been so strong, with increasing support from institutional investors and a constantly rising demand. Moreover, the SOPR of STH, an indicator that measures profitability of transactions by short-term holders, shows levels close to those observed before previous bullish rallies.

If selling pressure were to cause a temporary decline, long-term investors might see it as an opportunity for accumulation before a potential new all-time high. However, caution remains essential: markets tend to surprise, and a violent breakout could create momentary panic before buyers return. In this context, the evolution of the derivatives market, leveraged positions, and overall investor sentiment will play a decisive role in confirming the next major trend of bitcoin.