Market Psychology in the Bear Market: Why the Accumulation Phase Is Underway

Market Psychology in the Bear Market: Why the Accumulation Phase Is Underway

While Bitcoin trades at around $68,000, approximately 46 percent below its all-time high, a remarkable discrepancy between market psychology and fundamental valuation is emerging. On one hand, Google searches for "bitcoin zero" in the United States are reaching record levels ^[2], while on the other hand, both on-chain analysts and experienced treasury companies speak of one of the best accumulation phases in recent years ^[1]. This dichotomy between fear and opportunity characterizes the current market cycle and could set decisive courses for the coming months.

The upcoming Bitcoin options expiry with a volume of $10.5 billion on Friday will serve as a litmus test for short-term market direction ^[3]. But while institutional traders adjust their positions, the next accumulation wave is already forming among long-term oriented investors.

The Facts

The market situation currently presents itself as ambivalent: Bitcoin stands at approximately $68,000, 46 percent below its historical peak ^[2]. Simultaneously, Google searches for "bitcoin zero" in the United States are recording record values – a phenomenon that was already observed in 2021 and 2022 near local bottoms ^[2].

On-chain analyst James Check, also known as "Checkmate," remains confident despite this sentiment. In an X post, he explained: "The price pain is largely behind us in my opinion, but the time pain likely remains" ^[1]. His recommendation is clear: investors should "ignore the bears, stay very humble, and quietly hoard sats using the DCA principle from now on" ^[1]. Check emphasizes that one should have no illusions about "catching the exact bottom" – instead, he recommends dollar-cost averaging over the next six months ^[1].

Michael Saylor, founder of Strategy (MSTR), also demonstrates remarkable composure. Speaking to podcaster Natalie Brunell, he argued: "There really is no example of a successful technology investment where you didn't have to endure a 45 percent decline" ^[1][2]. Despite more difficult conditions for capital raising, his treasury company announced another Bitcoin purchase on Monday ^[1]. Saylor compared the current situation to Apple shareholders who had to wait seven years for the stock price to take off, while the current "valley of despair" for Bitcoin is not even 140 days old ^[2].

Austin Arnold, founder of Altcoin Daily, countered the pessimistic market sentiment with a clear thesis: "The probability that Bitcoin reaches a value of $1,000,000 is higher than the probability that it falls to a value of $0" ^[2]. This assessment was widely shared in the community, with the scenario of a total collapse increasingly considered implausible ^[2].

Short-term market dynamics, however, are heavily influenced by institutional derivatives. On Friday, an options volume of $10.5 billion expires, with Deribit dominating with a 76 percent market share – $4.5 billion in call options and $3.4 billion in put options ^[3]. Analysis shows that 88 percent of call options on Deribit will expire worthless if Bitcoin remains below $70,000 ^[3]. Put options at $72,000 and above total $1.15 billion – more than enough to offset existing call options ^[3].

Crucial for the options expiry could be the 90 percent correlation between Bitcoin and the Nasdaq 100 Index, which shows that sentiment among tech investors is currently the leading driver of market confidence ^[3]. To turn the tables at the February options expiry, Bitcoin bulls need a rally of 9 percent from current levels ^[3]. According to Polymarket, the probability of a Bitcoin price above $1,000,000 in 2026 is merely 2 percent, while the probability of a crash to $10,000 is estimated at 6 percent ^[2].

Analysis & Context

The current market phase exhibits classic characteristics of an accumulation zone. Historically speaking, extreme spikes in Google searches for "bitcoin zero" have always been contrarian indicators marking local bottoms. The psychological capitulation manifested in such search patterns typically precedes trend reversals – not because the sentiment is rational, but because it signals the extent of downward exaggeration.

Michael Saylor's argument deserves special attention. His analogy to successful technology investments is not only rhetorically skillful but empirically supported. Amazon stock fell 95 percent during the dotcom bubble, Tesla lost over 60 percent multiple times. The crucial question is not whether Bitcoin is volatile, but whether the fundamental thesis remains intact. And here, several factors speak in favor: The monetary policy of global central banks remains expansive, institutional adoption continues despite price decline, and treasury companies like Strategy are deliberately using the weakness to expand their positions.

The short-term burden from the options expiry should not be underestimated. With put options dominating in nearly every scenario below $74,000, structural selling pressure exists. The high correlation with the Nasdaq 100 also underscores that Bitcoin is not yet traded as an independent asset but as part of the risk-on universe. Should tech earnings disappoint or macroeconomic uncertainty increase, Bitcoin could come under further pressure.

In the medium term, however, the constellation speaks for a bottom formation. The dollar-cost averaging strategy that Check recommends is not only psychologically sensible but also statistically superior in volatile markets. Those who try to catch the exact bottom will act either too early or too late. Broad accumulation over months levels out this risk and uses volatility as an advantage. The conviction in the long-term thesis is decisive here – without it, every further setback becomes a psychological stress test.

Conclusion

• Extreme fear in the market, manifested in record searches for "bitcoin zero," historically marks accumulation zones rather than collapses – contrarian indicators should be taken seriously

• Dollar-cost averaging over the next six months offers a rational approach to minimize timing risks and profit from ongoing volatility without having to hit the exact bottom

• The short-term options expiry of over $10.5 billion favors put positions and could generate further pressure as long as Bitcoin trades below $74,000 – patience is the most important virtue in this phase

• The 90 percent correlation with the Nasdaq 100 shows that Bitcoin still depends heavily on tech investor sentiment – decoupling will only become likely with sustained recovery above $80,000

• Treasury companies like Strategy demonstrate their long-term conviction through continuous purchases despite more difficult capital raising conditions – institutional accumulation is already underway while retail investors still hesitate