Bitcoin Faces Bear Market Risk: What Really Drives a Recovery

• Trader Activity: Rising long/short ratios show interest, but leveraged positions limit short-term recovery.

• Supply Metrics: Bitcoin supply in profit and moving averages influence potential trend reversals.

• Price Action: Weekly structure and key resistance levels may determine bear market risk.

Bitcoin — BTC, has drawn significant attention as traders watch whether a recovery is possible or a bear market looms. Long/short ratios show growing interest in longs, yet price momentum has struggled to follow. Analysts warn that leveraged trading could be interfering with recovery attempts. Supply metrics and moving averages also suggest caution. How BTC behaves over the next few weeks could determine whether bulls regain control or bears take over.

🔍 Bitcoin Is Not “Weak” — It’s Being Tested

This is not a market where price action tells you the answer.
It’s a market where capital behavior does.

Over the last sessions, Bitcoin has done something retail consistently misreads:
It stopped trending — and started forcing… pic.twitter.com/C8sj4FW3cN

— Chence Alpha (@Chencealpha) December 30, 2025

Long/Short Ratios and Supply in Profit

Analytics platform Alphractal highlighted rising Bitcoin long/short ratios in a recent post on X. Traders have shown repeated interest in going long, signaling potential optimism. Normally, a higher long/short ratio for Bitcoin compared to altcoins signals a buying opportunity. However, this pattern has failed in recent months, showing that traditional signals may not guarantee short-term profits.

Joao Wedson, CEO of the platform, noted that leveraged traders could be limiting recovery, despite growing long positioning.Supply in profit also plays a critical role in determining BTC’s trajectory. Axel Adler Jr outlined that Bitcoin supply in profit peaked at 19 million BTC in October but dropped below 13.5 million BTC recently. The 30SMA and 90SMA of supply in profit show a 1.75 million BTC difference, a setup similar to late 2022.

At that time, the market entered an extended bearish phase. Bulls must maintain prices above the current range to keep the supply in profit above the 30SMA. The 1.75 million BTC gap is closing at a rate of about 28,000 BTC per day. If this continues, a bullish cross is projected for late February or early March, provided Bitcoin remains above $75k-$80k in January.

Price Action and Cycle Patterns

Historical patterns suggest caution for BTC bulls. In 2021, weekly price structure shifted bearishly after dropping below moving averages. A temporary bounce to the 50-week MA occurred, followed by a prolonged bear market. Bitcoin seems to be approaching a similar scenario, with weekly structures showing bearish tendencies. Price may first rebound toward the $101k-$103k resistance zone. If BTC fails to hold above $75k in January, the likelihood of a bear market taking hold increases significantly.

Traders should consider both macro and short-term signals before positioning. Open interest, leveraged trading, and supply in profit all influence recovery prospects. A price rebound alone may not indicate sustained bullish momentum. Structural factors, such as EMA crossovers and historical weekly patterns, provide clearer insight into long-term trend potential. Observing these metrics over the next few weeks could offer critical clues for Bitcoin’s direction.

Bitcoin’s long/short ratio indicates interest, yet leveraged traders could limit gains. Supply in profit and moving averages shape recovery potential. Price patterns suggest a temporary rebound before a possible bear market. BTC’s performance above $75k in January may decide the trend’s next major phase.