Bitcoin slides toward bear market after losing key support levels

Bitcoin's (CRYPTO:BTC) price has recently dropped below crucial support levels, raising concerns among analysts that the cryptocurrency could be entering a new bear market.  

After a period of consolidation, Bitcoin's price fell below its 200-day simple moving average (SMA), a key indicator that tracks the average price over the past 200 days.  

This breach suggests a shift in market sentiment toward a more bearish outlook.  

On-chain data reveals that short-term Bitcoin holders, who purchased their coins within the last five months, are now mostly underwater, with over 80% of these holdings at a loss.  

This group of investors is particularly vulnerable to selling during market downturns, which could exacerbate any bearish trends.  

However, the overall magnitude of these losses is still relatively low, which may prevent widespread panic selling for now.  

Technical analysts note that Bitcoin's price hovering close to the 200-day SMA, combined with increased leverage on major exchanges, indicates potential further declines.  

The next significant support level is the 365-day SMA, around $50,000, which could provide a buffer if the price continues to fall.  

While the loss of these key support levels is concerning, some analysts, like CryptoQuant's Adel Axel Jr., argue that the current market behavior is still "healthy," with no signs of panic selling among early investors.  

Instead, they view this period as a necessary correction following Bitcoin's surge to new all-time highs earlier this year.  

In summary, while the breach of the 200-day SMA signals potential bearish momentum, the situation remains fluid.  

Investors are watching closely to see if Bitcoin can find support at lower levels or if further declines will confirm a longer-term bear market.