Bitcoin may be nearing a floor in its current downturn, but analysts at Compass Point say a deeper decline would likely require a broader selloff in U.S. equities.

“While near-term risks remain skewed to the downside, we believe the crypto bear market is approaching its final innings,” Compass Point analysts Ed Engel and Michael Donovan wrote in a note on Monday. “Further downside would likely require a U.S. equity bear market.”

In their base-case outlook, the analysts expect bitcoin to bottom between $60,000 and $68,000, a range that has historically drawn buying interest from long-term holders. On-chain data shows that about 7% of bitcoin held by investors with holding periods of six months or longer was acquired within that zone. Compass Point’s central scenario places a bottom near $65,000.

Bitcoin recently fell below $81,000 and slid as low as $74,532 over the weekend, a level the analysts said reflects the average cost basis for both bitcoin ETF investors and the broader market. Since Jan. 15, bitcoin exchange-traded funds have seen roughly $3 billion in net outflows. With more than half of ETF assets now underwater, Compass Point warned that outflows could remain elevated, while the $81,000–$83,000 range may now act as overhead resistance.

The firm also highlighted a lack of meaningful support between $70,000 and $80,000, describing the area as an “air pocket.” Less than 1% of long-term holder supply was accumulated in that range, leaving the market vulnerable to additional selling pressure.

If bitcoin were to fall through the $60,000–$68,000 support band, the next potential downside target would be around $55,000—but only under more extreme conditions. Historically, bear-market lows have formed below the average cost basis for all bitcoin holders, which currently sits near $55,000.

However, the analysts noted that breaching that level has typically required significant external stress. During the 2022 downturn, bitcoin dropped below its average cost basis only after the combination of a U.S. equity bear market and several high-profile crypto bankruptcies.