Will the bear market end if Bitcoin breaks $66,000?

▲ Bitcoin (BTC) ©Godasol

As Bitcoin (BTC) concentrates its strength within a narrow trading range that has lasted for a month, the ability to break through $66,000 has emerged as a watershed moment that will determine the end of the bear market and the influx of large-scale buying. Although trading volume and market liquidity are still insufficient, selling momentum has also weakened, leading to an analysis that volatility could sharply increase if the prolonged stagnation ends.

According to investment media FXStreet on August 7 (local time), the total cryptocurrency market capitalization has returned to $2.19 trillion amid a risk-off trend. The market is failing to find a clear direction just above the 50-day moving average. While the recent 24-hour fluctuation rates of major cryptocurrencies remained between -2.5% and 1.5%, Cardano (ADA) rose by 7% and Algorand (ALGO) by 3.2%. In contrast, NEAR Protocol (NEAR) fell by 4.8% and Avalanche (AVAX) by 3.9%.

Bitcoin attempted to break through $65,000 again the previous day but failed. The price range has narrowed from $58,000-$66,000 in June to $62,000-$66,000 in the last 30 days. While the higher lower bound is positive, it is difficult to be confident that the bear market has ended as long as it fails to surpass recent highs. However, the media analyzed that if it breaks $66,000, investors who were on the sidelines might enter the market, leading to a self-reinforcing upward trend.

According to CryptoQuant, large holders of Bitcoin, Ethereum (ETH), and XRP (Ripple) are increasing their holdings while prices remain near or below their realized price. This whale accumulation reduces potential selling pressure and creates a pattern similar to the final stages of a bear market. Conversely, Tesseract Group pointed out that given the low trading volume and shallow market liquidity, the current situation should not be viewed as a mere pause, and caution should be exercised when using leverage during periods of declining volatility.

Transactions by small Bitcoin holders also surged after the Coldcard hardware wallet hack. Transfer volume reached its highest level in approximately four years, and K33 Research explained that increased network activity has often coincided with past price reversals. Meanwhile, a group of developers called the Bitcoin Red Team utilized advanced artificial intelligence (AI) models to discover 4,962 potential security issues in 390 related projects in a single day. Among these, 85 were classified as critical risks and 635 as high risks. The deadlock in discussions in the U.S. Senate regarding the U.S. cryptocurrency market structure bill and the Clarity Act has lowered the chances of its passage this year to an all-time low, remaining a limiting factor for a breakthrough.

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