In the current scenario, the key question is whether the market has actually bottomed. Historically, early bottoming signals tend to include investor profit-taking, clear signs of seller exhaustion, and an asset becoming deeply oversold.
Is Bitcoin [BTC] exhibiting any of these signals? From a technical standpoint, BTC’s RSI is deeply oversold, dropping to around 15. This move aligns with Bitcoin’s roughly 33% correction from the $97k peak.
Against this setup, BTC’s 4% intraday jump from $60k hints at a potential local bottom. However, the key question is whether on-chain metrics confirm this view. If not, the bounce could quickly turn into a bull trap.
Market questions BTC’s true bottom
Despite early signals, the market still doesn’t seem fully convinced.
On one side, analysts argue that Bitcoin’s current pullback is simply an “extension” of the 2025 bear phase, even though BTC printed a new all-time high near $126k during the cycle.
So, what is this divergence signaling? By this view, BTC has continued to underperform since the start of 2025 despite the ATH, falling 33% versus the S&P500, 58% versus gold, and 26% relative to M2 expansion.
In simple terms, analysts believe Bitcoin may now be carving out a bottom, supported by its 30% correction since early 2025. Under this view, the bear phase could be nearing an end, with $60k acting as a base for a reversal.
However, skeptics argue that $60k may mark the start of a deeper move.
Historically, Bitcoin bear markets have followed a pattern of deep but shrinking declines. If this trend continues, a potential 2026 bottom near a 70% drop from the $126k ATH would place Bitcoin around the $38k level.
This sets up a key strategic question for the market: Are participants positioning to accumulate the “dip,” or reducing exposure before a deeper correction pushes PnL further into the red and extends the bear phase?
Bitcoin’s recovery case weakens as structural stress builds
The road to recovery for Bitcoin HODLers doesn’t look immediate.
According to Glassnode data, more than 9.3 million BTC are underwater, the highest level since January 2023. Put simply, a large portion of holders are sitting on unrealized losses, putting market conviction under pressure.
At the same time, Bitcoin has dropped below its estimated electrical cost near $77k. When price falls beneath this level, mining becomes less profitable, increasing capitulation risk during late-stage bear markets.
Taken together, Bitcoin now needs a clear catalyst to absorb supply, reignite FOMO, and restore HODLing conviction among underwater holders. The key issue is that a strong institutional bid still hasn’t returned.
From a macro perspective, this sets up a classic supply-demand imbalance, with available supply outpacing demand. Rising capitulation risk only strengthens this dynamic, further discouraging long-term holding.
In this context, BTC’s structure doesn’t yet confirm $60k as a bottom.
The result? Bitcoin’s 4% intraday bounce could fade into another fakeout, potentially triggering long liquidations and sending price back toward the $50k zone, keeping the broader $38k bottom thesis firmly in play.
Final Thoughts
- Despite BTC’s 4% intraday bounce and early technical signals, on-chain stress, miner pressure, and unrealized losses suggest the $60k level is not yet a firm floor.
- Historical patterns and macro supply-demand imbalances indicate Bitcoin could revisit the $50k zone, keeping the $38k bottom thesis in play.
