Bitcoin has fallen by nearly half since October last year. A crypto fund manager who has experienced the previous three bull and bear cycles said that a set of indicators that often signaled market bottoms in the past suggest that this round of may be entering its final stages.
Brett Munster of Blockforce Capital uses four indicators to determine Bitcoin's position in the current decline cycle. One of these indicators has already entered the range that matched market lows in past cycles. The other two indicators are clustered around $54,000 to $58,000, still below Bitcoin's current price of about $73,800. Bitcoin briefly touched $60,000 in February this year and then rebounded significantly, meaning it has already reached the upper end of what Munster considers a possible bottom range.
The gap between the current price and the range where these indicators are fully triggered might seem to suggest caution on the surface. But Munster believes this is not the case, reasoning that in the last bear market, for long-term holders, the difference between buying at $19,000 and catching the ultimate low of $15,600 was almost negligible.
Although a market bottom is not guaranteed, Munster said: "Most of the decline may already be over, and the risk-reward asymmetry is improving. The market could see a turnaround around mid-year."
On Friday, Bitcoin rose by up to 5% to about $73,800, but then pared gains as U.S. stocks turned lower during the session. However, digital currencies still outperformed the broader U.S. stock market, as well as gold and silver.
The indicator that has already signaled is the so-called MVRV Z-Score, which measures where Bitcoin is trading relative to its on-chain cost basis. When this indicator is below 0.4, Bitcoin is usually considered undervalued. The current reading is about 0.38.
Other indicators have not yet reached corresponding levels. Among them:
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The Realized Price, which is the average price at which each Bitcoin was last moved on-chain, is currently about $54,000.
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The 200-week moving average (often a key support level in past cycles) is currently around $58,000.
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Another observed pattern is the gradual narrowing of the decline from peak to trough, which is often seen as a sign of an asset class maturing as liquidity and participation increase. This pattern suggests a potential bottom between $45,000 and $55,000.
Taken together, these four indicators point to what Munster calls a "high-probability accumulation zone," roughly between $45,000 and $60,000.
Even if selling pressure eases, sustained market recovery will require new demand, and there are already some signs of funds flowing back. U.S.-listed spot Bitcoin ETFs are attracting inflows again after months of outflows. According to media data, over the past month, inflows into funds including the iShares Bitcoin Trust ETF (IBIT) and the VanEck Bitcoin Trust ETF (HODL) totaled more than $1.6 billion.
Regarding this, Munster said: "Once the selling pressure subsides, even moderate new inflows could be enough to push the market higher."
It is also worth noting that some analysis points out that Bitcoin has recently acted as a geopolitical "barometer."
