Bitcoin Bear Market Triggers Concerns Amid Institutional Interest
By: Eliza Bennet
The Bitcoin market is currently experiencing challenging dynamics, as the popular cryptocurrency is reportedly in a bear phase, with industry analysts signaling potential further declines. According to insights from the US Securities and Exchange Commission, a bear market is traditionally understood as a situation where a broad index experiences a 20% drop over at least two months. Bitcoin has long surpassed this threshold, declining 41% from its October 2025 peak of approximately $126,000 to around $74,000 as of February 2026. Despite these figures, the bear designation is evolving, reflecting a structural persistence in investment versus capitulation.
Bringing further complexity into the bear market discourse is the contradiction found in institutional behavior. Recent surveys from Coinbase Institutional reveal that while 26% of institutions classify the current market as bearish, a significant 62% have either held or increased their long Bitcoin exposure, with 70% deeming it undervalued. This dichotomy emphasizes the notion of a bear market in 2026 as not just a series of sell-offs but a period of recalibration, where strategic accumulation persists amidst prevailing cautious sentiment.
Analysts utilize a multi-part framework to better assess these market conditions. Critical indicators include price trends—particularly Bitcoin's standing below key moving averages—and positioning in derivatives markets. Glassnode reports have detailed a shift towards protective strategies and a bearish options market skew, signaling investor apprehension towards further price drops. Additionally, weakened demand and liquidity constraints, as highlighted by CoinShares, underscore significant outflows from digital asset markets and declining stablecoin liquidity, hallmark traits of a bear phase.
The bear market’s resolution is speculated to rely on multiple catalysts. Analysis indicates that sustained positive flows, long-term moving average recovery, and balanced risk appetites could signal an end. While some like CryptoQuant foresee a crypto winter throughout 2026, others consider possible shorter and less severe corrections, termed "liquidity-wave events" rather than fixed cycles. This evolving interpretation of market cycles reflects a departure from the historic four-year cycle, urging market participants to monitor genuine demand progressions and liquidity conditions to anticipate the bear's cessation. Until such shifts occur, Bitcoin remains at a crossroads, with its upside constrained by macro uncertainty.
