Bitcoin Plunges Sharply; Where Is the Market Bottom?

Bitcoin's Sharp Decline Raises Concerns

After reaching an all-time high of around $126,000, Bitcoin has experienced a significant decline and is now trading around the $60,000 level. The drop has erased nearly half of Bitcoin's value and has led investors to debate when the current downtrend could end and when a cycle bottom might form.

Market behavior suggests that several important indicators are showing signs that the selling pressure may be approaching its final stage. However, it is still too early to say with certainty that a definitive price bottom has been established.

The Halving Pattern and On-Chain Signals

Investment firm VanEck believes that a significant portion of the recent correction can be examined within the framework of Bitcoin's four-year halving cycles. During each halving event, the amount of newly issued Bitcoin is reduced by approximately half. Following strong bullish periods, the market typically experiences increased volatility and price corrections.

VanEck uses its proprietary GEO framework to evaluate market conditions. This model examines factors such as global liquidity, ecosystem leverage, and on-chain activity.

According to the firm's assessment, two of these indicators are currently neutral, while ecosystem leverage appears to be in a more favorable condition. This combination could be a sign that a market bottom is gradually taking shape.

However, analysts continue to warn against trying to identify the exact entry point. Some believe that gradually entering the market could be a more reasonable approach than attempting to predict a precise reversal point.

The Position of Long-Term Bitcoin Holders

On-chain data analysis company CryptoQuant has also examined current market conditions using the Net Unrealized Profit/Loss indicator.

The firm's analyst, MorenoDV, noted that long-term Bitcoin holders are experiencing greater unrealized losses than the average market participant. Similar conditions have been observed in some previous periods when major market bottoms were forming.

Nevertheless, CryptoQuant emphasizes that the indicator could still decline further. Therefore, the possibility of continued downward pressure before the final bottom is established remains.

What Is Net Unrealized Profit/Loss?

Net Unrealized Profit/Loss, or NUPL, is an important indicator used in on-chain analysis. It measures the difference between the unrealized profits and losses of cryptocurrency holders and helps analysts assess market sentiment and the possibility of approaching potential reversal points.

Technical Indicators Point to a Trend Shift

Katie Stockton, founder of Fairlead Strategies, believes that some Bitcoin technical indicators have now entered levels that have historically been associated with long-term oversold conditions.

According to her, after several months of heavy selling pressure, signs of a shift in Bitcoin's long-term price momentum are emerging. The combination of oversold conditions and gradually improving momentum could increase the possibility of declining downward pressure.

Lower Volatility and Growing Buying Interest

Another factor attracting analysts' attention is Bitcoin's relatively low implied volatility compared with previous periods. At the same time, Ki Young Ju, founder of CryptoQuant, has stated that hedge fund positions in Bitcoin futures have moved toward a net-long position.

This could indicate that some large traders consider current prices more attractive for re-entering the market.

The Status of Key Indicators

What Price Range Do Analysts Expect for Bitcoin's Bottom?

Analysts do not share a single view regarding Bitcoin's potential bottom, and several different scenarios have been proposed.

Geoffrey Kendrick, head of crypto research at Standard Chartered, previously identified the $59,000 area as a potential cycle bottom. Bitcoin also closed June at approximately $58,566, marking its lowest monthly close in nearly two years.

By contrast, Galaxy Research has adopted a more cautious outlook and considers the $40,000–$46,000 range a possible bottom scenario for the fourth quarter of 2026.

Under the most bearish scenario, Bitcoin could potentially fall as low as $28,000. If that occurred, it would represent a severe phase of seller capitulation.

What Does Glassnode's Data Show?

Glassnode has also reported that a large number of Bitcoin indicators have entered territory associated with market capitulation.

According to this analysis, around 45 different indicators have entered capitulation territory, making this one of the longest periods of similar conditions since the collapse of the FTX exchange in November 2022.

Several strategists and analysts, including firms such as Cowen and CryptoQuant, as well as trader Peter Brandt, have suggested that a bottom could potentially form between September and October.

Is Bitcoin Approaching Its Final Bottom?

Bitcoin is trading around the $63,000 level, approximately 49% below its all-time high. Such a decline has put considerable pressure on investor sentiment and has shifted the market's focus toward when the downtrend might finally end.

On one hand, losses among long-term holders, oversold conditions, and changes in momentum could indicate that the market is approaching a stabilization phase. On the other hand, some indicators still do not rule out the possibility of further price declines.

As a result, several potential bottom ranges between $28,000 and $59,000 have been proposed. The reaction of long-term holders, institutional investment, and the level of selling pressure over the coming weeks could play an important role in determining Bitcoin's next direction.

Conclusion

Despite the growing signs that selling pressure may be approaching exhaustion, there is still insufficient evidence to definitively identify Bitcoin's bottom. Current analyses present a wide range of potential price targets, and investors will likely need to wait for further confirmation from on-chain data and technical indicators.