Bitcoin Capitulation Or Buy Zone? What the data on-chain shows

Bitcoin is parked at the aforementioned location. “critical point,” The traders are split into two camps: either a total capitulation, or an early stage of a long-term bottoming. Maartunn said in a video explanation on February 15, the data has started to align for the later, though he cautioned that any bottom will be more likely to take a long time to reach than to snap back.

Bitcoins at the Bottom of their Cycle?

Bitcoin currently trades at roughly 50% of its peak, which is a significant drop, although still less than previous bear markets that saw declines up to 70%. said. In his view, the more important question isn’t whether or not the market will go lower, but rather whether the usual ingredients for a turnaround are present.

Maartunn focuses first on what he calls “structural selling pressure” tied to spot ETFs. According to Mr. Hennessy’s figures, new spot ETFs are down $8,2 billion from their peak positions. “the largest on record”This creates persistent pressure to sell. He says the price of the ETF is currently around 17 percent below average. This puts a large portion of ETF investors underwater, and could incentivize the group to lower their stake.

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Then he pairs this flow story with an automatic reset of derivatives. Open interest The term “Has been” has been used to describe the time when the word “sliced by more than half,” In the last seven days, open interest has dropped 27%. Maartunn calls this a deleveraging that is painful to watch in real-time, but consistent historically with the conditions necessary for a bottom.

“Look, it’s definitely painful for anyone who is overleveraged, but getting rid of all that speculation is an absolutely necessary step to form a real sustainable market bottom,” “He said” “This is a signal of a major wash out of speculative excess.”

Maartunn uses short-term holders to gauge if stress-like capitulation is occurring. He uses the example of a short-term holding. MVRV ratio The average short-term investor is about 28% down at 0.72. “deep underwater” The group. His telling is that this reading is not routine: It’s the lowest since July 2022, and it has always been a band which corresponds with times of greatest financial hardship.

“This level of financial stress is pretty rare historically, and it usually happens during periods of major capitulation,” Maartunn said. “Now, sure, could this ratio go even lower? Absolutely. But what history shows us is that when we get down into these levels, the risk-to-reward profile for Bitcoin starts to look a lot better.”

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Maartunn also frames the current structure as a retest of a major support cluster — where the previous cycle’s all-time high intersects the upper boundary of an older trading range — a zone that has often mattered in past cycle transitions. He then moves on to a time-based analysis, suggesting that prior bear market durations suggest a wide window between June 2026 and December 2026. The last two cycles are most closely clustered between September and November.

In closing, he says that the bottom is rarely a one-day event. In his view, ETF-driven structural selling, the leverage flush, stress among short-term holders, and the retest of key levels can all coexist inside a longer bottoming process — with sentiment as the final tell.

“A real market bottom… that’s usually marked by just apathy,” “He said” “When engagement on social media is totally dead, your timeline is quiet, and honestly, nobody seems to care anymore. That period of total disinterest is often the point of maximum financial opportunity.”

Maartunn’s framework has a simple message: data could be moving towards early bottom formation, but confirming evidence – particularly in regards to flows and sentiment – may still come gradually, along with additional stress tests and volatility.

Bitcoin was trading at $68 710 as of press time.

Featured image was created with DALL.E chart by TradingView.com