Bitcoin Slides Below $78K as Bearish Signals Mount and Traders Brace for Deeper Correction

Bitcoin’s price dropped sharply over the weekend, falling below the $78,000 mark for the first time since April, as profit-taking met thin liquidity and a lack of new buyers. The sudden downturn has reignited bearish sentiment across the crypto market, with traders warning that the rally which previously lifted prices may have lost its momentum.

Market participants told CoinDesk that earlier strength, largely fueled by institutional demand and corporate bitcoin accumulation—particularly purchases linked to Strategy (MSTR)—has faded. With that support weakening, bitcoin has become increasingly exposed to forced selling, margin calls, and derivatives liquidations, amplifying downside pressure.

Several analysts believe the weekend’s decline is not an isolated event but part of a broader bearish trend that has been forming for months. Eric Crown, a former NYSE Arca options trader and widely followed crypto commentator, has consistently argued since late October that bitcoin is stuck in a sideways-to-downward phase. According to Crown, expectations of a quick return to all-time highs or a renewed rotation from metals into crypto represent misplaced optimism among bullish traders.

Crown points to multiple technical indicators reinforcing this cautious outlook. The monthly MACD crossed downward in November, a rare signal historically associated with extended corrections. At the same time, the weekly 21- and 55-period exponential moving averages have turned bearish, a setup that has often preceded multi-month declines. Adding to concerns, bitcoin’s yearly chart closed with a “shooting star” candlestick pattern, typically interpreted as a medium-term reversal signal.

Derivatives markets are echoing this sentiment. Options traders are increasingly positioning for further downside, with heavy interest building around the $75,000 level. On Deribit, the notional value of open interest in $75,000 put options has climbed to roughly $1.159 billion, nearly matching the $1.168 billion tied to $100,000 call options. This shift highlights waning confidence in near-term upside and growing expectations of a deeper pullback.

Bitcoin has also diverged from traditional risk assets since October, declining even as equities remained resilient. Crown views this as classic late-cycle behavior, where investors first exit more speculative assets. While not calling for a full market collapse, he suggests bitcoin could eventually revisit the mid-$50,000 to low-$60,000 range before stabilizing. Notably, he sees that zone as a potential long-term accumulation opportunity rather than the end of the broader crypto cycle.