The Bitcoin market has once again become the focus of analysts: five out of six key on-chain indicators already suggest that the price bottom has been reached. However, the sixth, most important signal, still raises serious concerns and indicates the opposite. Let's examine this dilemma in more detail.
Five Signals: Sellers Are Exhausted
First on the list is the MVRV Z-Score. This indicator compares Bitcoin's market capitalization with its realized capitalization, i.e., the average purchase price of all coins. It is currently around -1 — exactly the same zone where price bottoms were recorded in 2015, 2018, and 2022. This is a strong signal of the asset being undervalued.
The second indicator is the AVIV Z-Score. It also measures price relative to investor costs but only considers active coins, excluding long-lost ones. Its value is also approaching -1, although in previous cycles it dropped to -1.5 before the true bottom. This leaves room for a possible further decline but does not negate the proximity of a reversal.
The third key signal is the Sell-side Risk Ratio. This metric assesses how actively holders are realizing profits or losses. Its current value is the lowest in 43 months, comparable to the period of the FTX collapse, which marked the bottom of the last cycle. Low values indicate that sellers have nearly exhausted their potential.
The fourth signal is the Fear & Greed Index. In February of this year, it recorded an all-time record "bearish" value. However, when Bitcoin updated its price low in June, fear did not follow — this is a classic bullish divergence, indicating a weakening of panic.
The fifth signal is the four-year cycle. Despite the Stock-to-Flow (S2F) model no longer working, the temporal rhythm of halvings persists. The current bear market has lasted about nine months, whereas the average duration of previous ones was twelve months. This suggests the cycle could be shorter but does not rule out a prolonged bottom.
The Sixth Signal: Why ETF Flows Are the Main Risk
The sixth and, according to many experts, most important indicator is exchange-traded fund (ETF) flows. And it is currently showing a concerning picture. Over the past month, outflows from spot Bitcoin ETFs have reached a record $4.5 billion. The main impact was on BlackRock's IBIT fund.
The difference between the first five signals and the sixth lies in their nature. On-chain indicators merely confirm that sellers are exhausted. But ETF flows answer a fundamentally different question: have new buyers arrived? So far, the answer is no. This means that, despite technical undervaluation, the market lacks fresh capital for a reversal.
In the event of a new wave of selling, analysts highlight a support zone of $48,000–58,000. At the same time, there is a possibility that weak demand from funds could prolong the current cycle longer than usual. I would not advise guessing the exact bottom — it is much more reasonable to consider current levels for gradual purchases if you believe in Bitcoin's long-term potential.
My professional opinion: Until ETF flows reverse toward sustained inflows, it is premature to talk about the formation of a full-fledged bottom. However, the combination of five on-chain signals creates a strong foundation for medium-term accumulation. For investors willing to tolerate volatility, a window of opportunity is opening now, but with mandatory risk control.