Bitcoin is at a “critical point,” with traders divided between two familiar scenarios: a full capitulation event or the early stages of a lasting bottom. In a February 15 video analysis, CryptoQuant analyst Maartunn suggested the data is beginning to align with the latter, though he cautioned that any bottom is more likely to be a gradual process than a sharp rebound.
Is the Bitcoin Bottom In?
Bitcoin is currently trading about 50% below its all-time high. While that drop seems steep on its own, it remains smaller than the 70%+ declines seen in previous bear markets, Maartunn noted. He argues the more practical question isn’t whether prices can fall further, but whether the conditions that typically precede a turnaround are emerging.
Maartunn first points to what he calls “structural selling pressure” from spot ETFs. According to his data, these new ETFs have seen an $8.2 billion decline from their peak holdings—”the largest on record”—creating ongoing sell pressure. He adds that the current price is roughly 17% below the average purchase price for ETF investors, leaving a significant portion of them at a loss and potentially motivated to reduce their holdings.
He then connects this flow story with a sharp reset in derivatives. Open interest has been “sliced by more than half,” dropping from $45.5 billion to $21.7 billion, with a 27% decline in just the past week. Maartunn describes this as a broad deleveraging event—painful in the moment, but historically consistent with conditions that allow a bottom to form.
“Look, it’s definitely painful for anyone who is overleveraged, but clearing out all that speculation is an absolutely necessary step to form a real, sustainable market bottom,” he said. “This signals a major washout of speculative excess.”
To assess whether the decline is reaching capitulation-like levels of stress, Maartunn focuses on short-term holders. He cites the short-term holder MVRV ratio at 0.72, meaning the average short-term holder is down about 28% and “deep underwater” as a group. This isn’t a common reading: it’s the lowest level since the July 2022 bottom and a zone that has historically aligned with periods of maximum financial pain.
“This level of financial stress is pretty rare historically, and it usually happens during major capitulation,” Maartunn said. “Could this ratio go even lower? Absolutely. But history shows that when we reach these levels, the risk-to-reward profile for Bitcoin starts to look much better.”
Maartunn also frames the current price action as a retest of a major support cluster—where the previous cycle’s all-time high meets the upper boundary of an older trading range—a zone that has often been significant in past cycle transitions.
He then turns to time-based comparisons, noting that prior bear-market durations suggest a broad window for a bottom between June and December 2026, with the last two cycles clustering most tightly between September and November.
His final point is that bottoms are rarely single-day events. In his view, ETF-driven selling, the leverage flush, stress among short-term holders, and the retest of key levels can all occur within a longer bottoming process—with sentiment serving as the ultimate indicator.
“A real market bottom… is usually marked by apathy,” he said. “When social media engagement is 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.”
Overall, Maartunn’s analysis implies a straightforward takeaway: the data may be shifting toward early signs of a bottom forming, but confirming evidence—particularly around flows and sentiment—could still arrive in stages, accompanied by volatility and further stress tests.Bitcoin is currently trading at $68,710. Featured image created with DALL·E, chart via TradingView.
Frequently Asked Questions
FAQs Bitcoin Capitulation vs Prime Buying Zone
Beginner Questions
1 What does capitulation mean in Bitcoin investing
Capitulation is a market phase where investors overwhelmed by fear and steep price drops sell their holdings in a panic This mass selling often signals a potential market bottom
2 What is a prime buying zone
A prime buying zone is a period when an asset is considered significantly undervalued based on historical data and key metrics presenting a potentially good longterm buying opportunity
3 How can onchain data tell us about Bitcoins market state
Onchain data is public information recorded on Bitcoins blockchain It reveals the realtime behavior of investorslike how many are holding selling or moving coinswhich helps gauge overall market sentiment and trends
4 Is Bitcoin in capitulation right now
This depends entirely on the latest onchain metrics The article analyzes specific data points to determine if current conditions match historical capitulation events
5 As a beginner should I buy Bitcoin if its in a buying zone
Only invest what you can afford to lose A prime buying zone suggests a better relative opportunity but it doesnt guarantee immediate profits Its best suited for longterm investment strategies
Intermediate Advanced Questions
6 What are the key onchain metrics used to spot capitulation
Common metrics include
MVRV Ratio Compares market value to the realized value A low value suggests holders are at a loss
Exchange Net Flow A large influx of coins to exchanges can indicate selling pressure
Realized Losses Measures the total value of coins sold at a loss Spikes often occur during capitulation
SOPR Shows whether coins moved are on average being sold at a profit or loss
7 How does capitulation differ from a regular market correction
A correction is a moderate price decline Capitulation is more extreme characterized by a sharp highvolume selloff driven by panic and investor exhaustion often ending a prolonged bear market
8 Can onchain data predict the exact bottom
No Onchain data helps identify highprob