Bitcoin Bear Cycle Confirmed: Lark Davis Warns BTC Death Cross to $85K; ETH Sinks to $2.9K

Bitcoin Enters Potential Bear Market as Lark Davis Warns Cycle Breakdown; BTC Slides to $88K, Ethereum Weakens Further

Crypto analyst Lark Davis has issued a stark warning to investors, arguing that Bitcoin’s market structure is now closely mirroring the early stages of previous bear markets based on the traditional 4-year cycle theory. According to Davis, Bitcoin’s current drawdown closely matches the historical phase where momentum topped out and multi-month declines followed — raising questions about whether the cycle has truly peaked.

Lark Davis: Bitcoin Has Entered “Cycle Breakdown Territory”

Davis explained that Bitcoin is now at a crossroads: either the 4-year cycle has officially broken, or the market has entered a new bearish phase consistent with past post-halving patterns.

Despite the severity of the current downturn, Davis noted he is leaning toward the idea that the cycle is evolving rather than collapsing.

Glassnode Data Shows Sharp Divergence From Prior Cycles

A Glassnode chart shared alongside his commentary shows the 2025 Bitcoin trajectory diverging sharply from classic post-halving uptrends. Instead of continuing the typical rise into late-year euphoria, BTC has broken down amid:

• Liquidity pressures

• Regulatory uncertainty

• Cooled ETF demand

• Rising macro risk-off sentiment

BNB Slides Toward $880 as Key Support Breaks

BNB has also come under stress, falling rapidly toward $880 after snapping a major support level. The broader market is now experiencing multi-asset weakness, with traders reducing exposure across the board.

Crypto Market Bloodbath: 95% of Coins in the Red

Bitcoin is now trading near $88,000, down more than 20% in the last 30 days. The global crypto market cap has fallen to $3.04 trillion, sliding 4.82% in 24 hours, with 95% of the top coins flashing red.

The Fear and Greed Index plunged to 16, the lowest reading since April — firmly in extreme fear.

To highlight how severe the decline is: Zcash (ZEC) is the only top-50 coin in the green today, posting a modest 4% gain.

Macro Environment Accelerates Downward Pressure

The macro picture is far from supportive:

• Odds of a December Fed rate cut continue to decrease

• Bitcoin ETFs have now posted five consecutive outflow days

• BlackRock’s IBIT alone saw a record $523 million withdrawn yesterday

• Traders increasingly hedge against a potential 2026 crypto winter

Prediction markets are also tilting bearish. On Myriad, the prediction platform run by Decrypt’s parent company Dastan:

• 73.3% of traders are betting Bitcoin drops to $85K

• Only 26.7% believe BTC will rebound to $115K

• 62% of traders expect ETH to slide to $2.5K instead of rallying toward $4K

Bitcoin Technical Analysis: Death Cross Confirmed

Bitcoin opened the day at $92,911, then plunged over 4% to $88,605, marking a fresh seven-month low and losing the psychologically key $90K level again.

1. EMA Death Cross: Long-Term Trend Turns Bearish

The 50-day EMA has officially crossed below the 200-day EMA, forming the infamous death cross — a classic indication of longer-term bearish momentum.

BTC is now trading below both EMAs, creating layers of overhead resistance that bulls must reclaim before any recovery attempt.

2. ADX Signals Strong Bearish Trend

The Average Directional Index (ADX) reads 38.25:

• Above 25 = strong trend

• Above 35 = very strong trend

This indicates the current downtrend is powerful and persistent — not random volatility.

3. RSI Crashes Into Oversold Zone

Bitcoin’s RSI has dropped to 27.12, well below the 30 threshold.

An RSI this low rarely sustains for long, but it doesn’t mean a rebound is immediate. It often signals a zone where capitulation wicks can occur.

4. Squeeze Momentum Indicator Flashes Bearish Impulse

The SMI confirms strong selling pressure, showing the current compression is releasing downward.

Will Bitcoin Hit $85K? Key Targets and Levels

According to technical confluence:

Support Levels

• $84,451 — Fibonacci support

• $71,486 — Major long-term support

If BTC loses its current $88K–$89K support zone, a drop toward $85K becomes highly likely.

But due to oversold RSI, any move toward $85K could result in a violent bounce rather than sustained breakdown.

Resistance Levels

• $92,000 — Immediate resistance

• $100,492 — Descending trendline (break required for bullish reversal)

As of now, the path of least resistance remains down.

Ethereum (ETH) Technical Breakdown: Golden Cross in Danger

Ethereum is performing even worse on the downside, dropping 6.73% today from $3,121 to $2,911, with intraday lows at $2,895.

1. Golden Cross Under Threat

While ETH still has a golden cross (50-day EMA above 200-day EMA), the price has now fallen below both EMAs, meaning the bullish structure is seriously weakened.

The EMAs are close to converging — another death cross could form soon.

2. ADX at 42.4: Strongest Downtrend in Months

Ethereum’s ADX reading of 42.4 signals an even stronger bearish trend than Bitcoin.

3. RSI at 30.92: Near Oversold, But Not Yet Washed Out

ETH is just barely above the oversold level, creating a situation where:

• Bears remain in control

• A deeper oversold move could occur

• Reversal may not come until excess leverage is flushed

Key ETH Levels

Support

• $2,796 — First support

• $2,300–$2,500 — Strong multi-month support zone

Resistance

• $3,100 — 50-day EMA and resistance cluster

• $3,562 — Higher resistance region

Prediction markets align with the technical picture — most traders expect $2.5K before $4K.

Conclusion: Market in Fear, Cycle Structure Breaking, but Reversals Often Start Here

Bitcoin and Ethereum are both showing:

• Deep oversold readings

• Strong bearish momentum

• Broken or soon-to-break trend structures

Lark Davis’ assessment captures the moment well: this may not be the end of the 4-year cycle — but the cycle is changing, and markets are adjusting violently.

Amid extreme fear, ETF outflows, tightening macro conditions, and heightened bearish conviction, the market remains fragile. However, these same conditions are historically where strong counter-trend rallies often begin.

Nikolaj Krastev publication: "Bitcoin Bear Cycle Confirmed: Lark Davis Warns BTC Death Cross to $85K; ETH Sinks to $2.9K" was written for 24crypto.news

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