Bitcoin is showing signs of a late-stage downtrend, but the formation of a final cycle bottom has not yet been confirmed. My analysis of market signals shows that we are in a phase where capitulation has already affected a significant portion of indicators, but not all of them.
Key metrics: 8 out of 12 in the capitulation zone
I track 12 key indicators that reflect the state of the market during periods of extreme sell-offs: the depth of BTC's drawdown, mining economics, holder behavior, and other on-chain metrics. At the moment, eight of these indicators are in the capitulation zone, with all 12 having reached critical values at least once over the past three months. This creates the impression of a classic signal of an approaching bottom: bitcoin has lost about 49% from its October 2025 all-time high, and 30-day realized volatility has fallen to 27.2% — significantly below the long-term average of around 80%. The price has stabilized in the range of $62,000–66,500.
Historical parallels: caution above all
However, when comparing with previous episodes where 8–12 capitulation indicators were triggered, the picture becomes less clear-cut. The average return of bitcoin 90 days after such signals was 12.8%, and 180 days later — 32%. This is lower than the usual historical returns on these horizons (15.2% and 36.3%, respectively). The advantage only appears on a one-year horizon, but the sample is small and overlapping, so it cannot be relied upon as a guarantee of a reversal. Capitulation may mean that the bulk of the sell-off is behind us, but it does not promise an immediate recovery.
Structural differences of the current cycle
It is important to note that the current drawdown is likely to be less deep than in past bear cycles, when declines reached 78–94%. The current decline is about 49%, which is associated with the emergence of U.S. spot ETFs, growing institutional participation, and the absence of systemic collapses like Celsius, Three Arrows Capital, or FTX. The cycle duration also differs: the last three bear markets lasted on average 12.7 months from peak to maximum drawdown. Bitcoin is now roughly 10–11 months after the October high, which points to a possible start of the accumulation phase between September and November 2026.
Behavior of long-term holders: a worrying signal
One of the most concerning factors remains the behavior of long-term investors. Over 30 days, the volume of coins held by holders for more than a year decreased by approximately 356,000 BTC — to 11.84 million BTC, or by 2.9%. The share of supply held by this cohort has fallen below 60% for the first time in several months. This suggests that even after an almost 50% drawdown, some old holders continue to lock in positions, which is not typical of a fully formed accumulation phase. At the same time, U.S. spot bitcoin ETFs show the opposite dynamic: over the past 30 days, they received about $663 million in net inflows, whereas a month earlier they lost approximately 40,010 BTC (about $2.4 billion).
My conclusion: the market is at a transitional point where capitulation is no longer far off, but the bottom may require additional time to be confirmed. Investors should prepare for volatility in the coming months, yet structural improvements — institutional demand and ETFs — make this cycle less destructive than previous ones. On-chain metrics, including the recovery of spot demand, provide the first hints of a reversal, but the final signal will only appear when long-term holders stop selling.