Bitcoin (BTC) has fallen more than 22 percent over the past month, intensifying debate over where this bear market will form a bottom. Some analysts are leaning toward a possible drop below $40,000, while others counter that a bottom has already been formed.

On Feb. 9 (local time), blockchain media outlet BeInCrypto reported that bitcoin plunged to $60,000 on Feb. 6, hitting its lowest level in a year. It later rebounded and is now trading around $70,354, up about 1.2 percent on the day. Even after the rebound, broader market sentiment remains cautious.

10x Research said in a recent report that the downtrend is not yet over. It assessed that ETF outflows and a shift of funds into stablecoins are continuing, and that investors are focusing on deleveraging and liquidating positions rather than aggressive bargain buying. "Traders are focusing on reducing risk rather than a typical rebound," 10x Research said.

Against that backdrop, analysts are estimating potential bottom ranges for bitcoin using various indicators. Market analyst Ardi pointed to Fibonacci retracement analysis tied to past cycles, noting that in the 2022 bear market bitcoin formed a bottom at the 78.6 percent retracement level. That level is now about $39,176, suggesting room for further declines, the analysis said.

Historical drawdowns are also a key clue. Analyst Nehal noted that bitcoin bear markets have tended to see smaller declines over time. With drops of 93 percent in 2011, 86 percent in 2015, 84 percent in 2018 and 77 percent in 2022, the current cycle is expected to fall about 70 percent, a view that suggests a bottom could form around $38,000, according to the claim.

On-chain data is also being used as a core basis in the bottom debate. Analyst Ted Pillows said that based on the realised price of long-term holders, cycle lows tend to form about 15 percent below that price. The current realised price for long-term holders is about $40,300, implying a potential bottom around $34,500. He added that "the likelihood of falling to that range is low".

Some market participants, however, maintain that a bottom has already been formed. An anonymous analyst said bitcoin has tended to bottom at higher levels than the market expects in past cycles. "Most investors expect an additional crash to $40,000, $35,000 and even $20,000, but this consensus pessimism itself lowers that possibility," the analyst argued.

The analyst stressed that the launch of spot bitcoin ETFs and broader institutional participation have fundamentally changed market structure. "With billions of dollars flowing in and institutions that have completed infrastructure and education, it is unlikely they will allow bitcoin to fall below $50,000 again," the analyst said, adding that structurally pushing it below $50,000 would require a major event rather than a simple shift in sentiment.

CryptoQuant analyst Darkfost said bitcoin's Sharpe ratio fell to -10, marking its lowest level since March 2023. He said a negative Sharpe ratio has historically often appeared around bottoms, but warned it does not mean an immediate end to the bear market. He said bitcoin has entered a phase in which its risk-reward structure is changing in an extreme way, and that it cannot be ruled out that this phase could last for months or that further declines could appear before a meaningful reversal.