Bitcoin's price is facing forecasts that tap sub-$50,000 levels, mirroring patterns observed in previous bear markets. As of January 31, 2026, technical analysis indicates that Bitcoin has entered a bear market, with key support levels failing and realized price flipping to new resistance.
Factors Contributing to the Bearish Outlook
Several factors are contributing to the current bearish sentiment surrounding Bitcoin. The break of the $84,000 support level on the daily timeframe, followed by the loss of another key daily support at $79,541, has solidified the view that the market has shifted into a bearish regime. This sequence of breakdowns across major support levels reinforces the shift in market dynamics.
Adding to the concerns, Charles Edwards, founder of Capriole, a quantitative Bitcoin fund, has warned that Bitcoin could fall well under $50,000 if the network fails to develop quantum resistance by 2028. Edwards emphasized the urgency of implementing a patch by 2026, stating that without a fix next year, Bitcoin faces the biggest bear market in history, dwarfing the FTX collapse. Quantum computing poses risks to crypto encryption systems, potentially exposing user keys and sensitive data to malicious actors.
Historical Parallels and Market Sentiment
The current market conditions are drawing comparisons to previous Bitcoin bear markets. A crypto bear market is characterized by a prolonged period of declining prices, reduced trading activity, and negative sentiment. Such periods typically follow a major cycle top and can last for several months to a year. During these phases, Bitcoin and altcoins may experience significant drops, ranging from 60% to 90%, prompting investors to shift towards safer or long-term positions.
The trend remains in favor of bears with structure, momentum and moving averages all leaning south. Rejections in the $84,500–$85,000 range reinforce short-term resistance, and the inability to hold above $86,000 limits upside potential. As long as the price stays trapped below these zones, $81,000 remains vulnerable and the charts continue to favor downside liquidity.
Institutional Perspective
Institutions are also acknowledging the bear market. A recent survey by Coinbase Institutional and Glassnode revealed that one in four institutions believe that crypto has entered a bear market. However, the majority of these institutions still consider Bitcoin to be undervalued and have largely maintained or increased their exposure since October 2025. This seeming contradiction is explained by the fact that institutions often use cycle labels to describe regime and positioning, while their assessment of "value" is based on a longer-term horizon, considering factors such as adoption, scarcity, market structure, and the regulatory environment.
Potential Price Targets and Future Outlook
Veteran trader Peter Brandt has suggested that Bitcoin could experience one final dip, potentially testing the $50,000-$60,000 zone, before a stronger bounce back towards its previous all-time high.
Despite the current bearishness, it's important to remember that bear markets are a natural part of Bitcoin's cycle. Each previous bear market bottom has been higher than the last, demonstrating Bitcoin's long-term growth trajectory. While short-term volatility and price declines can be unsettling, they often lay the foundation for renewed growth and future institutional participation.