An experienced market watcher named Willy Woo says something important about Bitcoin. He thinks the current market downturn, or bear market, is getting stronger. He also says Bitcoin could be moving toward the second part of a plan that happens in several steps. In simple words, he believes the worst may still be ahead for the world’s biggest cryptocurrency. This view is not the same as many optimistic talks that Bitcoin is just having a normal pullback. Woo’s idea is that the downturn is not over yet and may get harder before it gets better.
What does Phase 2 mean? Think of a bear market like a long tunnel that has several sections. Investors and analysts sometimes call this a multi-stage downturn. Woo argues that Bitcoin is in the early section, but it could soon move into the next one. He says we are watching signals that show the market will stay weak for a while.
Phase 1 is ending, but trouble could come in Phase 2
Woo explained his idea in a series of posts on X, the platform some people still call Twitter. He wrote on February 18 that his view uses a three-phase bear market framework. He places Bitcoin at a crucial moment, near the moment when Phase 1 ends and Phase 2 begins.
One of the main signals he mentions comes from volatility metrics. In finance, volatility means how much prices move up and down. When volatility goes up a lot for a long time, it often means prices will go down more. Woo says we are still seeing volatility rise. This suggests the bear trend is gaining ground and could keep going for a while.
Woo also notes that some people who are optimistic about Bitcoin will call this a simple correction inside a bigger bull market. A correction is when prices move down a bit within a longer rise. But Woo argues those optimistic voices often do not show hard proof of money actually flowing into Bitcoin. In simple terms, they say the price will rise again, but they do not show clear signs that new investors are buying strongly.
He says his own liquidity models — tools that try to measure how much money is available to buy or sell — match the volatility signals he sees. If liquidity is getting tighter, it means less money is available to support prices. That can push prices lower. Woo argues that the second part of the bear market will come when global stocks, or equities, start to weaken. When big markets around the world fall, Bitcoin often reacts even faster than those stocks because it is smaller and more sensitive to changes in liquidity. In his view, Bitcoin is in Phase 1 right now and is close to Phase 2.
Woo also talks about what happens later in the bear market. He describes the final part as “the light at the end of the tunnel.” In this stage, liquidity should turn around — money starts to come back into markets, and outflows (money leaving markets) may reach a high point before settling down. He warns, though, that there could be one last price drop just before or right after the peak of those outflows. In plain language: a temporary drop could occur just as money starts to move back in, before the market finally steadies.
Some analysts see mixed signals
Not all experts see the same clear bear picture. A few analysts have pointed to different data that could support a more hopeful view for Bitcoin in the medium term.
- Axel Adler Jr. wrote that Bitcoin’s Entity-Adjusted Liveliness metric peaked in December 2025 and has begun to fall. This metric tracks how active Bitcoin is relative to how long people hold it. In the past, when this kind of metric starts to decline after a period of selling, it can be a sign that accumulation (people buying and holding) is happening again. Adler Jr. notes that this pattern has appeared during previous accumulation periods that last about 1.1 to 2.5 years.
- GugaOnChain looks at valuation using the MVRV Z-Score, a tool created by Murad Mahmudov and David Puell. He says the current reading, around 0.48, places Bitcoin close to historical areas where investors tended to accumulate more than they were selling. In simple terms, some buyers may see the current price as a good deal compared with their average buying cost, which could suggest buying pressure could rise again.
In short, while Willy Woo points to ongoing weakness and a potential Phase 2, other analysts see signs that buying interest could grow and the market could form a base for a later rebound. The market often has mixed signals, and different indicators can tell different stories at the same time.
If you hold Bitcoin or are thinking about buying, here are a few simple ideas to understand what these analyses may mean for you. These are not financial advice. They are explanations of what experts are talking about, in easy language.
- Expect longer weakness, but watch for turning points: A bear market usually lasts longer than a single bad week. If liquidity stays tight and volatility stays high, prices can fall for a while. But at some point, money might start to return to the market. When that happens, prices can stop falling and begin to rise again. This is what some people mean by a possible Phase 3 or final recovery, even if a short-term drop happens before it.
- Liquidity matters a lot: Liquidity is how easily you can buy or sell something without changing its price. If there is not enough money available to buy, prices can fall quickly. If more money returns to the market, prices can rise. Think of it like a busy marketplace: if many buyers arrive, prices go up; if buyers leave, prices go down.
- Volatility shows price swings: Higher volatility means prices move up and down a lot. When volatility rises for a long time, it often means investors are unsure about the price direction. It can be a warning that bigger moves are coming.
- Valuation indicators show potential interest from buyers: Some indicators try to measure whether the market price is below or near the average cost at which people bought Bitcoin in the past. If prices are near those lower costs, many buyers may think it is a good time to buy. If prices are well above those costs, it may indicate seller pressure or less incentive to buy now.
In any case, Bitcoin markets move for many reasons. They are influenced by changes in the global economy, changes in technology, and even simple shifts in investor mood. It helps to stay informed, to study many different opinions, and to remember that investing always carries some risk. People who own Bitcoin should think about their own goals and risk tolerance. Some investors prefer to hold for a long time, while others watch for short-term opportunities. Whatever strategy you choose, it’s important to be careful and informed.
Below are plain-language explanations of some used terms. Each term is linked to a simple, reliable source that explains the word in more detail.
- Bitcoin — Bitcoin is the first decentralized cryptocurrency. It was created in 2009 by an unknown person or group using the name Satoshi Nakamoto. It runs on a peer-to-peer network and uses a public ledger called the blockchain. Transactions are verified by mining and it operates without a central issuing authority. Wikipedia: Bitcoin
- Bear market — A bear market is a period when prices are falling or expected to fall, reflecting pessimism and negative sentiment. It is the downward counterpart to a bull market. Wikipedia: Market trend
- Volatility (finance) — Volatility is how much a price moves up or down over time. It is usually measured by the standard deviation of returns. It tells us how much prices can swing. Wikipedia: Volatility (finance)
- Liquidity — Liquidity is how easily an asset can be bought or sold in the market without changing its price. It shows how quickly something can be turned into cash. Wikipedia: Liquidity
- Equity (finance) — Equity is ownership in an asset or a company. In accounting, it equals assets minus liabilities and shows what belongs to the owners. Negative equity means the business owes more than it owns. Wikipedia: Equity (finance)
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