Bitcoin's price has recently shown clear signs of weakness, falling back below six figures and prompting a reassessment of its near-term outlook. With several crucial technical and on-chain levels now compromised, the probability of retesting new all-time highs in the coming weeks has significantly decreased, dropping below 50%. While this could change rapidly if major levels are reclaimed, current conditions suggest a market transition away from trending strength and towards a deeper corrective phase.

In this environment, the strategy of "buying the dip" requires careful consideration. While historically effective in a confirmed bull trend, attractive dips in a bear market can still lead to substantially lower prices. Downtrending markets often feature short-term rallies and sharp retracements, making data-driven reactions more critical than pre-emptive bottom predictions. Historical analysis, particularly evident in the Short-Term Holder Realized Price chart from the last cycle, reveals multiple dips before a market bottom was reached, with this metric acting as key resistance until sustained recovery. A small allocation on current dips might be justifiable if price meaningfully reclaims key levels, but a more defensive approach involves holding off on further buying until deeper macro confluence emerges.

Several key levels are crucial to monitor for understanding Bitcoin's broader market cost basis and potential accumulation zones. The MVRV Z-Score and Bitcoin Realized Price indicate that the network's realized cost basis clusters around the mid-$50,000s, a figure that continues to rise daily. Historically, bear market bottoms have often occurred when Bitcoin's price trades below its Realized Price. Similarly, the 200-Week Moving Average, also sitting in the mid-$50,000s, has historically presented strong long-term accumulation opportunities when price converges with it. These key levels slowly ascend each day, implying a potential bottom could form at $60,000, $65,000, or even higher, depending on the duration of Bitcoin's downward trend. The underlying principle is that value typically surfaces when the spot price trades near the average historical cost of the network, especially when supported by confluence from key buy levels.

Analyzing supply and demand signals provides further insights. The Value Days Destroyed (VDD) Multiple is an important metric for identifying stress points among long-term holders. While very low readings often coincide with market bottoms by suggesting old coins are not moving, a sharp spike can indicate capitulation pressure, often preceding significant market turning points. Currently, the VDD Multiple continues to rise as price falls, suggesting that many holders are distributing into weakness. This behavior is not characteristic of a cycle bottom, which typically sees extreme and compressed forced selling. The market appears to be unwinding rather than exhausting. Furthermore, Long-Term Holder Supply has been in a downtrend. Ideally, this metric should stabilize and begin to increase again before a major bottom can be confirmed, as bottoms form when the most patient participants start holding, not exiting.

Funding rates also offer a window into market sentiment and potential capitulation. Periods of peak fear are typically marked by heavy short positioning, negative funding rates in Bitcoin's derivatives markets, and large realized losses. These conditions signal that weaker hands have capitulated and stronger hands are absorbing the supply. However, the market has not yet exhibited the signature panic selling and shorting commonly associated with major cyclical lows. Without significant stress in derivatives and a rush of loss-taking, it is challenging to assert that the market has undergone a full flush-out.

To invalidate the current bearish scenario and signal a return to bullish momentum, Bitcoin must reclaim several key structural levels. These include the significant $100,000 psychological zone, the Short-Term Holder Realized Price, and the 350-day moving average, as depicted in the Golden Ratio Multiplier chart. Temporary wicks or single-day closes above these levels are insufficient; sustained closes, coupled with strength in global risk assets, would be necessary to indicate a genuine shift in trend. Until such conditions are met, the prevailing data leans towards caution.

In conclusion, since breaking below several important support levels, the market outlook for Bitcoin has become more defensive. While Bitcoin's long-term fundamentals remain strong, the short-term market structure does not reflect a healthy bull trend. The recommended strategy for investors includes refraining from buying every dip, waiting for strong confluence before scaling in heavily, respecting broader macro conditions and ratio trends, and only adopting an aggressive stance once the market definitively proves its strength. The objective for most investors is not to perfectly identify the exact top or bottom, but rather to strategically position near areas of high probability with sufficient confirmation to mitigate months of unnecessary drawdown.