Bitcoin has dropped from $120k to nearly $90k, nearly a 30% decline. Honestly, since I've been consistently investing through dollar-cost averaging, this situation is psychologically tough. I keep regretting every day that I should have sold at $120k. Profits have been greatly wiped out. But right now, the most important thing is to determine whether we've truly entered a bear market or if this is just a temporary correction.

I’ve looked at various indicators and organized my thoughts. First, looking at the Fear & Greed Index, it’s currently at 15, indicating extreme fear. It’s been at this level for a month, so the market is quite pessimistic. However, historical data shows that such extreme fear often presents buying opportunities. Rather than a full-blown bear market, it looks more like a short-term panic.

From a technical perspective, the situation is complex. There’s a death cross between the 50-day and 200-day moving averages, similar to the start of the 2022 bear market. This is clearly a bearish signal. The downside target is said to be around $70k–$80k. On the other hand, the RSI indicator has fallen into oversold territory, suggesting a rebound could occur within 1–2 weeks. So technically, in the short term, it looks like a bear market, but it could also be an oversold condition.

Fundamentally, the outlook isn’t as bad as it seems. Institutional investors like MicroStrategy are still adding to their holdings, and ETFs saw inflows of $61.9 billion annually. However, since Q3, there’s been outflows, likely driven by panic selling among retail investors. The macro environment is also highly uncertain, with potential US government shutdowns, debates over rate cuts in December, and other factors piling up.

On-chain data shows active addresses have decreased by 20% from their peak, and transaction volume has dropped sharply by 30%. But importantly, the proportion of long-term holders has increased to 65%, indicating that many are holding through the dip rather than panic selling. This suggests the market isn’t completely collapsing.

The four-year cycle theory for Bitcoin is also changing. The influx of capital into ETFs has altered the traditional halving cycle dynamics. It resembles the late 2017 cycle, where after a 20% drop, a rebound often followed. It’s quite possible that the cycle could extend into 2026. Many are targeting a price in the $200k range.

In summary, it’s clear that we’re in a short-term correction phase within a bear market. Both technical and on-chain indicators show downward pressure, with about a 40% chance of testing the $70k–$80k range. But it’s not a full-blown bear market; the foundation remains stable. Institutional buying continues, and long-term holders are not selling.

The future scenarios are threefold: a 15% chance of further correction testing $70k; a 50% chance of a range-bound correction over time with sideways movement; and a 35% chance of a rebound that pushes above $100k and sets new highs. Probabilistically, it’s more likely that the market will continue to fluctuate like a roller coaster or consolidate sideways before rising again, rather than continuing a steep decline. I don’t think we need to be overly pessimistic about a full-blown bear market.