Bitcoin and other cryptocurrencies have been trading sideways for the past four weeks, with investors debating whether the bear market has bottomed out or if another decline is in the offing. The vulnerability found in Coldcard wallets has shaken the Bitcoin community.
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Bitcoin price is on an important support level
At the time of publishing this market review, Bitcoin (BTC) is trading at $64,800. At the time of the previous market review, the price was $59,500, which means an increase of about 9 percent in five weeks.
Let’s look at Bitcoin’s price development using weekly candles. The blue trend line is the 50-week average and the purple trend line is the 200-week average.
As you can see from the chart, Bitcoin’s price has settled right above the 200-week average. Although the price closed one week clearly below it in late June, this trend line provides strong support for the price.
Bitcoin has been trading in a very narrow range between the 200-week average and the bottom of the consolidation channel for four weeks. The previous four weekly candles have all closed between $63,500 and $65,500.
No changes in the big picture
Since the price has not moved in four weeks, there have been no significant changes in the big picture either. Bitcoin is still deep in a bear market, and the decline has lasted for 10 months.
Previous bear markets have lasted roughly a year. The difference from the previous two bear markets is that this time we cannot use stock market signals to assess the bottom.
Cryptocurrencies have completely decoupled from the price development of stocks and other risk assets. Major stock indices have continued their steady rise throughout the crypto bear market; for example, the S&P 500 set a new record earlier this week.
The situation was different in the 2022 bear market, when stocks and cryptos fell hand in hand. The stock market’s turn higher in late 2022 sent a strong signal that the crypto bear market was also coming to an end. Now we must estimate the bear market bottom primarily using historical data.
The most significant macro indicators are:
- Duration of the bear market
- Bitcoin’s price development
- Investor sentiment
The bear market has lasted 10 months, which is 2–3 months less than in previous declines. The Bitcoin price has fallen by approximately 50 percent from its peaks, which is clearly less than in previous bear markets. Investor sentiment is gloomy, but not yet desperate or full of capitulation. This probably means that the bear market will continue for a little longer.
In addition to macro trends, dozens of on-chain indicators can be used to bracket the bottom. However, their predictive value is usually weak, and it is easy for an investor to pick out indicators that support their own narrative.
However, Bitcoin’s potential bottoming is supported by one significant fact. Whether it’s crypto or stocks, a bear market bottom is near when bad news no longer drives the price lower. Bitcoin’s price hasn’t really reacted to bad news or macroeconomic uncertainty in July.
Coldcard attacks have shaken the Bitcoin community
July has been a quiet time on the news front, but that changed a week ago. In the last days of July, reports began to spread on X that a vulnerability had been found in the Coldcard wallet, which is popular with Bitcoin maximalists.
Coldcard is a type of cold wallet. It is a physical device, like the popular Ledger and Trezor wallets. You can only store Bitcoin on a Coldcard, which is why it has been popular with the Bitcoin community. We will not go into the details of the entire incident in this news. You can read a comprehensive article on the subject here.
Roughly speaking, the issue is that Coldcard began using a weak random number generator years ago as a result of a software update. This caused Bitcoin wallets created with certain versions to be insufficiently secure. Someone discovered this vulnerability and then started cracking the private keys of these wallets.
It is important for investors to understand that this is only a problem with Coldcard wallets, not a vulnerability that affects all crypto wallets. So far, more than 2,000 bitcoins worth over $130 million have been stolen from Coldcard wallets.
This is insane!
According to @glxyresearch, the total losses from the #Coldcard hack may have reached 2,055 $BTC($130M).
More than 7,700 victim addresses have been affected. pic.twitter.com/GizWlDbYpz
— Lookonchain (@lookonchain) August 4, 2026
The Coldcard case has been a serious blow to the Bitcoin community. This time, it is not about user negligence, phishing, or storing bitcoins on an exchange. Coldcard users did everything right, but still lost their bitcoins.
The incident is being widely discussed on social media, and there are many theories. Anyone interested in the matter can search for information using the term “coldcard”.
Many of the victims are ordinary small investors who do not actively follow Bitcoin news or social media. It is likely that hundreds, if not thousands, of users could have moved their bitcoins to safety if they had known about the vulnerability.
What can we learn from the incident? At least two things:
- Follow industry news
- Diversify your investments
Bitcoin (and cryptos more broadly) is a new investment class and an emerging technology. This is not the same investment as an index fund, whose status can be reviewed once a year. Technology is constantly developing, there are changes in regulation, and so on.
Diversification is another important lesson. There are currently an almost countless number of wallets and other services on the market where you can store your crypto. You can favor domestic crypto exchanges, which you know are regulated and safe to use. Some Bitcoin investments can also be made as ETF/ETN derivatives.
Even a novice user can easily diversify their Bitcoin holdings in 5–10 different ways. There is no 100% safe solution because all investments involve risk. By diversifying, you can significantly reduce losses from the failure of a single storage solution.
No major changes in the macroeconomy
Next, let’s look at the state of the macroeconomy, where no major changes have occurred either. During the spring and summer, the headlines have been dominated by two themes: the war in Iran and the new chairman of the US Federal Reserve.
A final solution to the Iran war has still not been found. Recently, both sides have performed small-scale attacks. While this indicates the conflict has not escalated further, the parties have yet to agree on ending the war.
The market has not reacted significantly to the war in Iran for many months. In other words, it believes that Iran and the US will find a solution one way or another. It is most sensible for an ordinary small investor to trust the market in such uncertain events.
The de-escalation is also supported by the fact that the US midterm elections are only a few months away. Donald Trump needs to end this unpopular war before that and, at the same time, lower gasoline prices for American consumers.
The market has also been following the actions of the new Fed boss, Kevin Warsh, with some nervousness. Macro analysts have been unusually divided on whether Warsh will raise or lower the Federal Funds Rate. Last week, Warsh appeared before the media for the second time following an FOMC meeting. Warsh kept the interest rate unchanged as he did a month earlier.
BREAKING: Fed Chair Kevin Warsh says the Fed didn't need to raise rates today because the bond market already did the job for it.
Here's what he said:
– Inflation is still above the Fed's 2% goal. The Committee says it will deliver price stability, no exceptions.
– There is no… pic.twitter.com/jkw990Knge
— Bull Theory (@BullTheoryio) July 29, 2026
At the moment, it seems that Warsh is not making any dramatic moves. He clearly does not want to lower the interest rate and fuel inflation, but he also cannot afford to raise rates due to the massive US national debt and the pressure from Donald Trump.
Warsh is between a rock and a hard place, trying to keep all parties more or less satisfied. Right now, it does not seem that investors need to worry much about the Fed’s decisions.
Historically weak months ahead
The discussion about the formation of a bear market bottom is intensifying. Is Bitcoin following previous bear markets or is “this time it’s different”?
Investors should remember that August and September are historically among the weakest months of the year. Below is a picture of Bitcoin’s price development during the summer months.
September is the only month, along with June, when the average price movement is negative. In addition, September is also one of the weakest months of the year in the stock market. As the table above shows, August and September are weak months even during bull markets.
Historical data suggest that Bitcoin’s price will decline again during August and September, reaching the final bottom of the bear market. Investors should at least be prepared for this.
Daily price development also supports this idea. The graph below shows Bitcoin’s price with daily candles. The blue trendline is the 50-day moving average, and the purple trendline is the 200-day moving average.
The bottom of a bear market is typically reached when the 200-day moving average turns sideways. For now, the trendline remains in a strong downtrend.
Bitcoin’s price also needs to practically break through the 200-day moving average before a bull market can truly begin. This wouldn’t require a big price rise, as the 200-day moving average has already fallen to almost $70,000.
The situation is currently very different from, for example, six months ago. The bottom of the bear market is approaching, and the probability of a new bull market is slowly increasing every day. However, we haven’t received any really strong signals of a trend reversal yet.