Bitcoin Capitulation Or Buy Zone? What On-Chain Data Shows Right Now

Bitcoin is sitting at a “vital level,” with merchants break up between two acquainted scripts: a full capitulation occasion, or the early innings of a sturdy bottoming course of. In a Feb. 15 video explainer, CryptoQuant analyst Maartunn argued the info is beginning to line up for the latter, however with a transparent caveat that any backside is extra more likely to be a grind than a snapback.

Is The Bitcoin Bottom In?

Bitcoin is at present buying and selling roughly 50% beneath its all-time high, a drawdown that appears extreme in isolation however nonetheless smaller than the 70%+ declines seen in prior bear markets, Maartunn said. The extra actionable query, in his framing, is just not whether or not the market can go decrease however whether or not the components that normally precede a flip are showing.

Maartunn factors first to what he describes as “structural selling pressure” tied to spot ETFs. According to his figures, the brand new spot ETFs have posted an $8.2 billion drawdown from peak holdings, “the most important on document”, creating persistent promote stress. He provides that the present value is round 17% beneath the common shopping for value for ETF holders, placing a significant slice of that cohort underwater and doubtlessly incentivized to chop publicity.

He then pairs that circulate story with a mechanical reset in derivatives. Open interest has been “sliced by greater than half,” falling from $45.5 billion to $21.7 billion, with a 27% drop in open curiosity within the final week alone. Maartunn describes this as a broad deleveraging occasion, painful in actual time, however traditionally in line with circumstances that permit a backside to kind.

“Look, it’s undoubtedly painful for anybody who’s overleveraged, however eliminating all that hypothesis is a fully needed step to kind an actual sustainable market backside,” he mentioned. “This is a sign of a significant wash out of speculative extra.”

To gauge whether or not the drawdown is translating into capitulation-like stress, Maartunn focuses on short-term holders. He cites the short-term holder MVRV ratio at 0.72, implying the common short-term holder is down about 28%, “deep underwater” as a bunch. In his telling, that’s not a routine studying: it’s the bottom degree for the reason that July 2022 backside, and a band that has traditionally aligned with durations of most monetary ache.

“This degree of monetary stress is fairly uncommon traditionally, and it normally occurs during times of main capitulation,” Maartunn mentioned. “Now, certain, may this ratio go even decrease? Absolutely. But what historical past exhibits us is that once we get down into these ranges, the risk-to-reward profile for Bitcoin begins to look so much higher.”

Maartunn additionally frames the present construction as a retest of a significant assist cluster — the place the earlier cycle’s all-time high intersects the higher boundary of an older buying and selling vary — a zone that has usually mattered in previous cycle transitions. From there, he strikes to time-based analogs, suggesting prior bear-market durations suggest a broad window between June and December 2026, with the final two cycles clustering most tightly between September and November.

His closing level is that bottoms are hardly ever single-day occasions. In his view, ETF-driven structural promoting, the leverage flush, stress amongst short-term holders, and the retest of key ranges can all coexist inside an extended bottoming course of — with sentiment as the ultimate inform.

“An actual market backside… that’s normally marked by simply apathy,” he mentioned. “When engagement on social media is completely useless, your timeline is quiet, and actually, no one appears to care anymore. That interval of whole disinterest is usually the purpose of most monetary alternative.”

Overall, the implication of Maartunn’s framework is easy: the info could also be shifting towards early backside formation indicators, however the confirming proof, significantly round flows and sentiment, may nonetheless arrive in levels, with volatility and additional stress checks alongside the best way.

At press time, Bitcoin traded at $68,710.