Bitcoin Selloff Flashes Capitulation Signal as Bear-Market Bottom Nears
Summary
- On-chain data showed the ratio of UTXOs sold at a loss fell to its lowest level of the bear market, signaling capitulation.
- Bitcoin previously traded near $26,000 when the metric reached a similar level before rebounding, and that zone proved to be a highly profitable buying range for long-term investors.
- Still, on-chain analysis showed long-term holder SOPR is moving into negative territory, suggesting capitulation is still unfolding, while Bitcoin remains in a bottoming phase and momentum is still significantly weakened.
Forecast Trend Report by Period
Bitcoin is beginning to flash signs of a bear-market bottom as loss-cutting sales surge among investors, Cointelegraph reported on June 28, citing CryptoQuant analysis.
CryptoQuant contributor Darkfost wrote that Bitcoin unspent transaction output, or UTXO, data show the ratio of UTXOs sold at a loss relative to those sold at a profit has fallen to its lowest level of the current bear market.
The signal marks the first bottom indication of the current correction, he said. The jump in investors willing to sell at a loss suggests broader market capitulation is beginning.
Darkfost said the indicator points to a bear-market bottoming phase. The last time the ratio dropped to a similar level was in mid-2023, when Bitcoin fell to about $26,000 and later rebounded.
Periods like this have consistently offered highly profitable buying opportunities for long-term investors, he said. They also tend to coincide with the point when most investors lose interest in the market and give up. He added, however, that bottom formation takes time and is unlikely to be completed quickly.
Market analyst DurdenBTC, citing the same metric, said the long-awaited bottom signal has appeared. He described it as an indicator that has identified every cycle low since 2016.
He added that the market could still feel extremely difficult over the next few weeks. If this were already an easy buying zone, he said, such a signal would not exist.
In a separate analysis, Darkfost said the spent output profit ratio, or SOPR, for long-term holders is also gradually moving into negative territory, suggesting those investors are entering a capitulation phase as well. He added that the current correction was driven largely by a sharp increase in exchange inflows from short-term holders.
On-chain analytics firm Swissblock said Bitcoin has moved past the initial breakdown phase but remains in a bottoming process. Prices are stabilizing, but momentum remains significantly weakened.
Suehyeon Lee
shlee@bloomingbit.ioI'm reporter Suehyeon Lee, your Web3 Moderator.