Bitcoin rebounds slightly, but weekly decline streak clouds near term outlook

Bitcoin extended its rebound over the weekend, rising more than 4% on Saturday to trade around $68,864, but analysts remain divided on whether the move marks a sustainable recovery or just a temporary bounce in a broader downtrend. The world’s largest cryptocurrency had climbed by $2,684, or 4.06%, as sentiment improved marginally after a volatile week, though caution continues to dominate market positioning.

The recent gains came after bitcoin briefly tested lower levels earlier in the week, reflecting lingering uncertainty across global risk markets. While prices have stabilised in the short term, trading volumes remain muted and volatility has eased, suggesting many investors are staying on the sidelines while awaiting clearer macroeconomic signals, particularly from U.S. inflation data and interest rate expectations.

Despite the weekend bounce, bitcoin is still down sharply from its recent highs. The cryptocurrency has fallen about 44% from its October peak, underlining the depth of the correction that has unfolded over the past several months. On Friday, bitcoin was trading near $69,180, still well below the levels seen during the rally late last year.

Adding to concerns about the medium-term outlook, strategists at Ned Davis Research (NDR) have warned that further downside may lie ahead, even after the heavy selling already seen. In a note to clients issued earlier this month, NDR said that if the current downturn develops into a full-fledged “bitcoin winter,” prices could fall significantly from current levels.

What lies ahead

According to Pat Tschosik, chief thematic strategist at Ned Davis Research, and analyst Philippe Mouls, Bitcoin could potentially decline to as low as $31,000 in a severe bear-market scenario. Such a move would imply a further drop of roughly 55% from current prices, extending the pain for investors who entered near recent highs.

Tschosik and Mouls said their outlook is based on an analysis of historical bitcoin drawdowns. They noted that during past major sell-offs, bitcoin has typically experienced peak-to-trough declines of around 70% to 75% when a correction has escalated into a prolonged bear phase. If history repeats, the current slide may still have some way to run.

Ned Davis Research, as reported by Business Insider, also pointed out that across bitcoin winters dating back to 2011, the cryptocurrency has recorded an average decline of about 84%. These downturns have not only been deep but also lengthy. On average, previous bitcoin winters have lasted roughly 225 days, highlighting the potential for extended periods of weakness.

So far, only about 129 days have passed since bitcoin peaked in early October, suggesting that, from a historical perspective, the current correction may still be in its earlier stages if it follows past patterns. This comparison reinforces the view that the recent rebound, while encouraging for bulls, may not be enough on its own to signal a decisive trend reversal.

For now, market participants appear to be balancing short-term optimism against longer-term risks. While easing selling pressure and improved derivatives positioning hint at stabilisation, bearish forecasts such as those from Ned Davis Research underscore the fragile nature of the recovery. As a result, bitcoin’s outlook remains highly dependent on broader macro conditions and investor risk appetite in the weeks ahead.