Crypto bear market is nearing end, with $60K as key bitcoin floor, Compass Point analysts say

The crypto market may be closing in on the bottom of its current downturn, but analysts at Compass Point say it will take a broader risk-off event to push bitcoin $BTC$79,061.70 significantly lower.

“While near-term risk remains skewed to the downside, we believe we're approaching the final innings of the crypto bear market,” analysts Ed Engel and Michael Donovan wrote in a report Monday. “Further downside would likely require a U.S. equity bear market.”

Their base case calls for bitcoin to bottom between $60,000 and $68,000, a zone where long-term holders have shown buying conviction in past cycles. “We see very strong support within this range and our base case assumes $BTC bottoms near ~$65k,” they wrote. “Of $BTC owned by Long-term Holders (6+ months), 7% was acquired between $60-68k.”

Bitcoin recently broke below $81,000 to as low as $74,532 over the weekend, a level the analysts say reflects the average cost basis for both bitcoin exchange-traded fund (ETF) investors and the broader market. “Bitcoin ETFs recorded $3bn net outflows since 1/15. With over 50% of ETF AUM now underwater, we see risk that outflows remain elevated while ~$81-83k becomes overhead resistance,” they wrote.

'Air pocket'

The price range between $70,000 and $80,000 now presents an “air pocket,” with little structural support above $70,000, according to Engel and Donovan.

“Less than 1% of Long-term Holder supply was acquired within this range,” they said, pointing to the potential for further selling pressure.

If bitcoin falls through the $60,000–$68,000 support range, the next stop could be around $55,000 — but only under more extreme conditions. “Past bear markets have bottomed below the average cost basis for all historical buyers,” they said. That level currently sits around $55,000, but “during the 2022 bear market, it took the combination of an equity bear market and several high-profile crypto bankruptcies to breach $BTC's average cost basis.”