21Shares: Bitcoin has not entered a deep bear market; volatility and consolidation may continue until the end of the year.

According to Odaily Planet Daily, Maximiliaan Michielsen, an analyst at 21Shares, a cryptocurrency ETP issuer, analyzed that while Bitcoin's price falling below $100,000 has triggered market concerns about a bear market, the analysis suggests that this decline is a short-term correction, not the start of a deep or long-term bear market. Although volatility and consolidation may continue until the end of the year, the fundamental factors driving this cycle remain solid, supporting its long-term positive outlook.

The recent weakness in Bitcoin has been mainly affected by three factors: forced liquidation, selling by investors holding large amounts of Bitcoin and outflows of funds from ETFs, and liquidity tightening caused by macroeconomic events.

Since October, the market has undergone a deleveraging process totaling $32 billion, including $3 billion in liquidations in the past week. Large investors are also taking profits, selling approximately $12 billion worth of Bitcoin since October. Meanwhile, the spot Bitcoin ETF saw an outflow of $866 million last Thursday, the second-highest single-day outflow on record. Furthermore, the US government shutdown has led the Treasury to withdraw approximately $150 billion in cash from the financial system, exacerbating liquidity constraints.

Despite this, there are still positive signs in the market. Selling pressure from long-term investors has eased significantly, and assets are shifting to new, more stable holders. Meanwhile, liquidity conditions are expected to improve, with the US quantitative tightening projected to end in December and government spending resuming. Furthermore, the continued expansion of the global money supply typically supports Bitcoin. Against this macroeconomic backdrop, increased investor demand to hedge against fiat currency devaluation enhances Bitcoin's appeal as a store of value.

While Bitcoin is technically in a short-term bear market, analysts believe this decline is more of a valuation reset than a deep bear market with a drop exceeding 80%. Crucially, there are currently no classic bear market catalysts: no securities defaults, systemic fraud, regulatory shocks, or macroeconomic tightening cycles. Historical data shows that corrections of this magnitude typically end within 1 to 3 months and often mark a consolidation phase before the next upward move. In the long term, Bitcoin's fundamentals remain solid, and the outlook remains constructive.