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

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, he believes 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 is mainly due to three factors: forced liquidations, selling by investors holding large amounts of Bitcoin, ETF outflows, and liquidity tightening caused by macroeconomic events. Since October, the market has experienced a total deleveraging process of $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 in history. Furthermore, the US government shutdown led to the Treasury withdrawing approximately $150 billion in cash from the financial system, exacerbating liquidity constraints. Despite this, positive signals remain in the market. Selling pressure from long-term investors has significantly eased, 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. Additionally, 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 currently 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, no classic bear market catalysts have emerged: 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.