Bitcoin faces up to 20% further downside from current levels, with the long-term holder cost basis near $48,000 serving as the worst-case floor, according to Bitwise Head of Research Europe André Dragosch. The projection comes as the cryptocurrency market navigates recent sell-offs driven by substantial ETP outflows, raising concerns about a deeper correction before a recovery materializes.

Dragosch mapped out structural support levels beneath the current spot price, identifying three critical zones. The 200-week moving average sits near $61,000, the realized price is near $56,000, and the long-term holder cost basis is near $48,000. Each level historically represents a zone where buyers have stepped in, though $48,000 marks the extreme downside scenario if all supports fail.

Despite the bearish outlook, Bitwise’s experimental bottom-cycle probability model began ticking higher last week. However, on-chain indicators remain below the extremes typically seen at prior cycle lows. Dragosch attributed the recent sell-off primarily to roughly $2 billion in weekly ETP net outflows, equivalent to about 50,000 Bitcoin sold into the market over a short period, rather than a slowdown in corporate treasury buying.

Support Levels and Market Indicators

The following table outlines the key support levels identified by Bitwise:

Galaxy Head of Research Alex Thorn offered a similarly cautious view, stating Bitcoin has not yet bottomed. In a report published Thursday, Galaxy noted only four of 13 historical bottoming indicators have triggered so far. The firm projects a potential bottom between $40,000 and $46,000 sometime between now and Q4 2026, adding that traditional assumptions of 75% to 80% peak-to-trough declines are less likely as cycle amplitudes compress.

Bitcoin fell roughly 28% from its May high near $82,000 to below $60,000 during the latest drawdown before recovering to $63,300 Friday, up 0.9% on the day. Dragosch expects the market bottom to arrive before the consensus October halving-cycle timing.

Altcoin Outlook and Legislative Catalysts

Regarding altcoins, Dragosch said Bitwise’s Altcoin Excitement Index shows no signal. The catalyst for any alt season rotation hinges on whether the US passes the CLARITY Act, which Polymarket currently prices at roughly 60% odds for passage this year. Without that legislative unlock, Dragosch sees no structural catalyst to rotate capital from Bitcoin into the broader altcoin market.

Bitcoin's current downturn fits the profile of a classic but mild bear market, according to Strive executive Matt Cole. Speaking on the Bitcoin Magazine Podcast on June 10, Cole stated that the asset is already in a bottoming process. He emphasized that the fundamentals around Bitcoin have never been stronger, pointing to growing institutional adoption, ETF distribution through retirement accounts, improving regulation, and the rise of digital credit products.

Cole expects Bitcoin could move back above $80,000 and potentially return to six figures later this year. He highlighted that BTC-backed digital credit products represent a new source of capital entering the ecosystem. The demand for these instruments is not primarily coming from investors selling Bitcoin, but from fresh capital seeking yield.

Digital Credit and Yields

The emergence of digital credit products is seen as a mechanism to make future bear markets less severe. Cole noted that retail investors and independent financial advisers have led early adoption, similar to how retail investors embraced Bitcoin before institutions. He mentioned specific products in the market, including Strive's (NASDAQ: SATA) 13% dividend and Strategy's (NASDAQ: STRC) 11.5% dividend.

These yields can help investors beat fiat debasement while gaining exposure to Bitcoin-backed balance sheets.

Critique of Fiat Systems

Cole argued that the long-term case for Bitcoin remains rooted in the failure of fiat currencies and rising debt burdens. "The fiat system, I think, has basically terminal cancer," he said. He contended that fixed income and the traditional 60/40 portfolio are structurally challenged because investors are buying debt during a debt crisis. In his view, digital credit could become a replacement for part of the income sleeve in portfolios by offering yield without relying on traditional government or corporate debt.