Bitcoin’s [BTC] Q2 recovery was cut short at around $83K. What followed was a 25% pullback to sub-$60K, effectively erasing this quarter’s entire recovery gains.
Short sellers made a killing thanks to Fed rate hike fears, Strategy’s overhang, and geopolitical tensions. Now, the crypto asset has retested the 200-weekly MA (Moving Average, white), a key level that marked previous market cycle bottoms.
While this could help kick off the next Bitcoin bull market cycle, analysts expect another sharp drawdown.
Bitcoin market bottom: Close, but not there yet
Renowned analyst Benjamin Cowen recently cautioned that there will likely be a scary dump below the 200WMA in late 2026.
A decisive move down later this year, while initially scary, would likely just set up the market cycle bottom for Bitcoin in Q4 2026.
His projection was based on the 2022 market pattern. Bitcoin broke below the bull market cycle bottom support of the 200WMA for the first time in 2022.
At the time of writing, Bitcoin’s price was trading just below $62K. And, this marked the fourth week that BTC has been flirting with the 200WMA.
Back in 2022, it stayed below the level for months before the bull market kicked off in September 2023. This happened after BTC decisively reclaimed the 200-day MA (200DMA, blue), a level that typically acts as the bull market cycle support.
The 2020 rally also began in September and accelerated in Q4. So, if the current trend mirrors the past two cycle patterns, Cowen’s projection for a sharp drop below 200WMA and subsequent recovery in late 2026 could be validated.
In fact, beyond the price charts, there has been a worryingly high leverage and weak demand. This was a perfect combination for a liquidation event that could push BTC lower, according to Binance Research analysts.
Taken together, another slip below the bear market support or an extended dip below $60K couldn’t be overruled as we enter Q3. In such a scenario, the next potential floor price would be around $53K, the realized price for most BTC holders.
But it’s not all gloomy for bulls who are tired of timing the market bottom. From an on-chain perspective, BTC may be close to marking the final market bottom based on past patterns.
Currently, long-term holders (those who’ve held BTC for more than 6 months) control about 78% of BTC’s invested capital (realized cap). According to on-chain analyst James Check, these levels marked the past market bottom.
Historically, this metric tends to peak late in bear markets, as supply gradually migrates from weaker hands to investors with longer time horizons.
Check added that BTC may be approaching the “pointy end” of this bear market. In other words, going by the behavior of long-term investors, the sub-$65K level could be a great buying opportunity.
In fact, Bitfinex analysts reinforced Check’s outlook and added,
Long-term $BTC holders sold into the 2024 ETF rally. Now they are doing the opposite. The cohort that took profit at the top is accumulating the decline.
Is consolidation likely ahead of Q2-end?
The short-term headwinds for BTC bulls are OG whales (those who’ve held BTC for +5 years) and macro pressures.
According to Galaxy Research, this cohort’s selling pressure (blue bar) overwhelmed the U.S. ETF absorption rate (purple) in the past few weeks. On average, the net BTC demand, factoring in ET, Strategy bids, and OG distribution, has been negative at 120K BTC.
Simply put, the thin demand and the previously highlighted leverage risk could derail BTC in the near term.
For its part, Singapore-based QCP Capital believes the May PCE inflation data, scheduled for Thursday, the 25th of June, could be the catalyst for the end of Q2 positioning. The firm noted,
Following recent hawkish rhetoric from policymakers, an upside surprise could reinforce expectations for further policy tightening, while a softer-than-expected reading would likely support crypto and other risk assets.
As of writing, consensus forecasts suggest a headline PCE rising 0.4% on a MoM (month-on-month) basis, with core PCE expected to jump by 0.3-0.4%.
Still, institutional and professional traders held a bullish outlook for the asset in the near and mid-term.
This was reinforced by positively rising Skew across 1-week, 1-month, and 3-month tenors. It meant there was more demand for calls (bullish bets) than puts (hedging, bearish bets) for upcoming options expiries at the end of Q2 and in Q3.
Will Q3 offer the last BTC buying chance?
Overall, the market bottom phase is a process and not a one-off event. As such, a dip towards $54K could still be on the cards.
Even so, if the 2022 and 2018 market patterns play out, Q3 2026 could be the last discounted buying opportunity for long-term holders.
But for a confirmed start of the next bull market cycle, BTC should decisively reclaim the 200DMA, currently at $76K.
Final Summary
- BTC could still slip below $60K again before marking a final market cycle bottom.
- Still, the drop could be the best buying opportunity if the next bull market phase starts in Q4 2026.