Bitcoin News: Bitcoin Enters Its ‘Fastest Bear Market Ever’ — But Key Liquidity Signals Hint at a Bullish Year-End Reversal

Bitcoin’s dramatic plunge to $80,600 on Friday extended what analysts are calling the fastest and sharpest bear market drawdown in BTC’s history, but back-tested macro indicators now suggest the current sell-off may be setting up a major bullish inflection point heading into year-end.BitcoinBTC: ~$84,000 (▼23% monthly, ▼10% weekly)The drop below $84,000 pushed BTC to test its 100-week EMA for the first time since October 2023 — the moment the current bull cycle began. According to the Kobeissi Letter, this sell-off marks the “fastest bear market ever” based on speed, depth, and cross-market liquidity stress.Futures liquidations surpassed $1 billion, while Bitcoin has now fallen 36% from its all-time high of $126,210 set just weeks ago.Key TakeawaysCrypto market cap erased 33% since October — a structural unwind, not a normal correction.Crypto funds have logged the largest outflows of 2025, totaling $3.2 billion in three weeks.The NFCI liquidity indicator is falling, historically preceding major BTC rallies by 4–6 weeks.BlackRock’s IBIT ETF is on track for its largest weekly outflow ever, intensifying sell pressure.Back-tested data across 105 macro indicators suggests Bitcoin may be entering a pre-bullish “reset zone.”$1.4B in Bitcoin Outflows Signal Structural Pressure — Not PanicThe total crypto market cap has collapsed from $4.2 trillion → $2.8 trillion since Oct. 6 — a loss of 33%. Analysts say selling pressure is “structural,” coming from:Long-term holders de-riskingDigital asset treasury (DAT) redemptionsETF rebalancing amid macro uncertaintyCrypto investment funds saw $2 billion in outflows last week alone — the worst weekly reading since February. Bitcoin accounted for $1.4 billion, with Ether seeing $689 million withdrawn.Average daily outflows relative to assets under management (AUM) hit all-time highs, dragging industry AUM down to $191 billion, 27% lower than in October.ETF Flows Deepen Bitcoin’s DrawdownSpot Bitcoin ETF flows remain negative, with no sign of sustained inflows.BlackRock’s IBIT — the largest U.S. Bitcoin ETF — is on pace for its biggest weekly outflow ever, nearing a break of February’s $1.17 billion record.These ETF flows have contributed materially to Bitcoin’s plunge into the $80K zone.Macro Liquidity Indicator Suggests Bitcoin Bottom May Be NearWhile many analysts are searching charts for a bottom, macro researcher Miad Kasravi points to a different leading signal: the National Financial Conditions Index (NFCI).After back-testing 105 financial indicators over a decade of Bitcoin price history, Kasravi found that:NFCI reliably leads major Bitcoin rallies by 4–6 weeks during macro regime shifts.Why NFCI Matters for BitcoinNFCI is currently at -0.52 and trending lowerEvery 0.10 decrease in NFCI historically aligns with 15–20% BTC upsideA drop toward -0.60 has historically preceded parabolic Bitcoin accelerationThis exact dynamic appeared:October 2022 → BTC rallied 94%July 2024 → BTC surged from $50K → $107KA December Liquidity Boost Is on the HorizonThe Federal Reserve is preparing to rotate mortgage-backed securities (MBS) into short-term Treasury bills.While not labeled as Quantitative Easing (QE), analysts note:“This resembles the 2019 ‘not-QE’ liquidity event that preceded a 40% Bitcoin rally.”If NFCI continues trending downward into December, it aligns with a historically reliable liquidity window — one that has preceded major Bitcoin reversals.What It Means for Bitcoin’s Year-End OutlookDespite the sell-off:Technicals show BTC retesting long-term cycle supportMacro liquidity indicators are improvingMarket structure resembles prior pre-rally washoutsETF outflows appear tactical, not structural exitsBitcoin’s Fear & Greed Index sits in Extreme Fear, often a contrarian bullish zone, according to Cointelegraph.