Bitcoin Breaks Below 365-Day Average as 46% Drawdown Tests Market Conviction

Bitcoin (BTC) hovered around the $68,000 level on Sunday UTC, extending a deep pullback that has left the market grappling with a key technical break and a deteriorating macro backdrop. The price is down roughly 46% from its record high of $126,080 set in October last year, a decline that analysts say is testing investor conviction far more than recent routine corrections.

The latest caution flag comes from on-chain analytics firm CryptoQuant, which said BTC has slipped below its 365-day moving average for the first time since March 2022. In its recent commentary, the firm argued that the current signal points to conditions that could be “more severe” than the early-2022 downtrend, a comparison likely to resonate with traders who view long-term trend lines as a dividing marker between bull phases and extended bear markets.

Market timing has added to the unease. The move follows a ‘quadruple witching’ expiration—when stock index futures, stock index options, stock options, and single-stock futures all expire—often associated with short-term volatility and repositioning in broader risk assets. At the same time, U.S. equities have struggled to find footing, with the S&P 500 on track for its longest streak of consecutive weekly declines since March 2025. For crypto, which has increasingly traded as a high-beta extension of global risk sentiment, the combination has amplified uncertainty rather than offering a clear directional catalyst.

While BTC’s spot price action has been relatively contained near $68,000, the technical headline has shifted the conversation toward positioning and investor behavior. Breaking below the 365-day moving average does not guarantee immediate downside, but it forces market participants to reassess whether their original thesis still holds—especially for those whose frameworks rely on long-horizon trend confirmation.

CryptoQuant’s warning also arrives at a time when investor psychology is under strain. After months of rapid repricing from the October peak, sentiment has become sensitive to strongly worded research notes, historical analogies, and social proof from prominent market figures. The result is a market that can feel heavy even on quiet trading days: less driven by fresh information than by how traders interpret familiar signals under stress.

In that context, the more consequential question may not be whether BTC picks a direction immediately, but how different cohorts respond to the same data. Trend-focused allocators are likely to treat the moving-average break as a test of ‘thesis integrity’—a prompt to revisit why they entered and whether the underlying premises changed. More tactical participants may treat the weekend stagnation as a staging period, monitoring for volatility compression ahead of next week’s major macro events and waiting for post-announcement price stabilization before initiating new risk.

Short-term crypto rotations could also resurface if BTC continues to range. Historically, periods of sideways bitcoin trading have sometimes preceded ‘liquidity migration’ into selective altcoins as traders seek relative momentum—though such shifts tend to be fragile when macro risk appetite is weakening.

For now, BTC’s 46% drawdown from the peak and the loss of a widely watched long-term trend line have reinforced a familiar reality of late-cycle markets: uncertainty is not just about price, but about process. As broader equities remain under pressure and post-expiration positioning continues to settle, crypto’s next major move may hinge less on a single headline and more on whether participants can avoid the most common error in drawdowns—changing their decision rules midstream simply to relieve discomfort.

Ultimately, the market is delivering a blunt message rather than a clear map. With bitcoin straddling a psychologically important level and macro conditions still unresolved, the coming sessions are likely to reveal not only where price wants to go, but which styles of risk-taking can survive the current regime.