Tech • IA • Crypto
MASTERCLASS - In Search of the Bitcoin Bottom
7/10TL;DR
A range of technical, on-chain, and cyclical indicators suggests Bitcoin has not yet reached a definitive bottom, with key signals pointing to further downside risk before a structural reversal.
KEY POINTS
Market structure still bearish
Bitcoin remains in a short-term downtrend, defined by lower highs and lower lows. A true trend reversal would require a break above the last major high near $97,000–$98,000, which has not occurred. Without this structural shift, the broader bias remains bearish despite intermittent rebounds.
Critical downside levels identified
A break below approximately $58,000 would confirm further downside continuation, establishing a new lower low. This would reset resistance zones and reinforce the bearish structure, opening the path toward deeper support regions.
Moving averages signal weak momentum
Key moving averages, particularly the 100-week and 200-week, continue to act as resistance. A meaningful recovery would require price to reclaim these levels, alongside a bullish crossover where shorter-term averages regain dominance over long-term trends.
RSI shows no clear capitulation
The Relative Strength Index (RSI) indicates weakening momentum but has not reached the extreme oversold levels historically associated with major bottoms. Previous cycle lows were marked by sharp momentum collapses, which are not yet fully evident.
ETF-driven liquidity forms major support
The introduction of Bitcoin ETFs in January 2024 created a significant institutional demand zone. This area is considered a strong support cluster, as large capital inflows occurred there. If revisited, it is expected to trigger substantial buying interest.
Realized price suggests deeper drawdown
The realized price, currently near $53,000, has historically acted as a key capitulation threshold. In past cycles, Bitcoin consistently dropped below this level before forming a bottom, implying that current prices may still be above typical cycle lows.
Capitulation not yet complete
Indicators such as SOPR (Spent Output Profit Ratio) and supply-in-loss metrics show stress in the market but not the extreme panic seen in prior bottoms. This suggests that a full capitulation phase—often necessary for a durable bottom—may still be ahead.
Cycle timing points to late-2025 window
The traditional four-year cycle remains influential, with projections placing a likely bottom between late August and early October. This aligns with historical timing patterns following extended bull phases and subsequent corrections.
On-chain data losing reliability
The growing dominance of ETFs and off-chain instruments is reducing the visibility of traditional on-chain metrics. As more investors gain exposure through financial products rather than direct ownership, indicators like realized price may become less predictive over time.
Market psychology and strategy remain key
Identifying the exact bottom is less critical than recognizing confirmation signals and adjusting strategy accordingly. Accumulation strategies, risk management, and timing of exposure are emphasized over attempting to buy the absolute low.
CONCLUSION
Bitcoin shows several signs of approaching a bottom, but key confirmation signals—particularly capitulation and structural reversal—are still missing, suggesting further downside or consolidation before a sustained recovery.