Analyzing the Bearish Hypothesis for Bitcoin Price Dynamics

There is growing discussion around a bearish hypothesis for Bitcoin (BTC) prices, contrasting with some indicators of a potential price rise. BTC’s performance remains stable amidst volatility in the S&P 500, suggesting a correction rather than a collapse. Markus Thielen from 10x Research highlights a possible consolidation phase for BTC, indicating possible bearish trends short-term but potential for recovery in the medium-to-long term, heavily influenced by the weakening of the US dollar.

The bearish hypothesis surrounding Bitcoin (BTC) has gained traction despite indicators suggesting a potential price rise. This complex speculation requires careful consideration as it connects various market trends and events.

Currently, Bitcoin’s price has maintained stability, contrasting with the significant decline in the S&P 500, which saw a 12% loss over two months, entering a bear market. While BTC’s losses have been steeper in percentage terms, comparing its volatility directly with the S&P 500 lacks context.

Instead, evaluating Bitcoin’s current levels against its performance prior to the Trump election provides greater insight. At the end of October 2024, the S&P 500 index stood around 5,700 points, peaking at over 6,140 in February 2025 before dropping to 4,835 in April. Though it has retraced to approximately 5,400 points recently, Bitcoin’s path has diverged. It peaked at $109,000 in January 2025 but has not returned to this high, with a recent low just below $75,000. Currently, it trades above $80,000, suggesting a correction rather than a collapse.

Markus Thielen, head of research at 10x Research, posits that Bitcoin might be entering a lengthy consolidation phase, with the potential for bearish trends in the short term. He notes that the current price mirrors levels from February 26, indicating a prolonged consolidation period. In the short to medium term, indicators suggest BTC may remain bearish.

Thielen highlights on-chain data indicating a more bearish than bullish market stance, noting that Bitcoin ETF inflows have only reached $225 million thus far in 2025, risking a negative trend as they head for a third consecutive month of decline. The ongoing uncertainty from the Trump trade war continues to negatively affect BTC and other risk-on assets.

There are concerns regarding the return of new Bitcoin buyers who entered via spot ETFs over the past fifteen months, as they appear to be exiting. The short to medium-term outlook reflects a bearish stance, although other analysts suggest that conditions may improve in the medium to long term, particularly post-May as market dynamics shift.

Recent expectations were for Bitcoin to drop below $75,000 and potentially under $70,000. Yet, despite minor dips, Bitcoin’s price has maintained above $80,000. Consequently, the chance of a decline to below $70,000 is weakening, especially due to the possibility of forced liquidations affecting pricing.

The American dollar’s strengthening or weakening significantly influences Bitcoin’s performance. The Dollar Index recently fell below 100 points, marking levels not seen since July 2023. The inverse correlation between Bitcoin’s price and the Dollar Index is evident, and the recent declines in the dollar may explain why Bitcoin has not plummeted further. Monitoring these trends is crucial, as the potential for the dollar’s continued decline could yield positive outcomes for Bitcoin in the longer term, necessitating a clear distinction between short-term fluctuations and long-term trends.