Bitcoin is showing signs of a late-stage bearish trend, but it is premature to claim a bottom is forming. My analysis of capitulation indicators shows that the market has triggered only two-thirds of the full set of signals, leaving room for further volatility.
Eight signals out of twelve
I track 12 key metrics that reflect market conditions during periods of extreme sell-offs: the depth of BTC drawdown, mining economics, holder behavior, and other indicators. At the current moment, eight of them are in the capitulation zone, with all twelve having reached critical values at least once over the past three months. This creates the illusion of a classic precursor to a reversal.
The cryptocurrency has lost about 49% from its all-time high set in October 2025, while 30-day realized volatility has dropped to 27.2% — significantly below the long-term average of around 80%. The price has stabilized in the range of approximately $62,000–66,500, which may indicate consolidation.
Historical parallels do not promise a quick recovery
Comparison with previous periods when eight to twelve indicators triggered simultaneously yields unexpected results. Bitcoin's average return 90 days after such signals was 12.8%, and 180 days later — 32%. For comparison, the asset's typical historical return on these horizons is 15.2% and 36.3%, respectively. The advantage only appears on the one-year horizon, but the sample is small and overlaps across periods, so it cannot be relied upon as a reliable forecast.
Capitulation may indeed mean that the bulk of the sell-off is behind us, but it does not guarantee an immediate reversal. The market often requires time to accumulate before a new impulse.
The current cycle differs from past ones
I expect the current drawdown to be less severe than in previous cycles. Historical bitcoin bear markets were accompanied by declines of 78–94%, whereas the current decline is about 49%. The difference is explained by the emergence of U.S. spot ETFs, a growing share of institutional investors, and the absence of systemic collapses like Celsius, Three Arrows Capital, and FTX.
The duration of the cycle also plays a role. The last three bear markets averaged 12.7 months from peak to maximum drawdown. Bitcoin is currently around 10–11 months after the October high, which points to a possible start of the accumulation phase from September to November 2026.
Long-term holders continue to sell
A concerning signal 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. Even after an almost 50% drawdown, some old holders are locking in positions, which is not typical of a fully formed accumulation phase.
On the other hand, U.S. spot bitcoin ETFs show the opposite dynamic: over the past 30 days, they have received about $663 million in net inflows, whereas a month earlier they lost approximately 40,010 BTC, or $2.4 billion.
My expert opinion: the current situation resembles a classic struggle between institutional demand and the actions of old holders. Until long-term investors stop selling, it is too early to talk about a sustainable bottom. However, structural market improvements, including ETFs and reduced volatility, lay the groundwork for recovery in the second half of the year.