Bitcoin: Is the Market Finally Approaching a Real Bottom?

Bitcoin is going through a phase of tension that increasingly resembles the beginning of a true bear market. Several on-chain indicators show that the market is approaching areas historically associated with cycle lows. Are we at the dawn of a general capitulation… or simply halfway through a cycle correction?

Bitcoin Enters a Critical Zone

The latest data published by CryptoQuant show an important change in the structure of the Bitcoin market. Today, about 11.2 million BTC are still circulating with an unrealized gain, while 8.2 million are held at a loss. This level had not been seen since the end of 2022.

For analyst “Darkfost,” this shift is not incidental. It is gradually bringing the market closer to the typical configurations of a true bear market.

At the previous cycle bottom, supply in profit dropped to around 9 million BTC, while supply in loss rose to 10.6 million. The current market has therefore not yet fully reached this level of pain, but is clearly approaching it.

This observation supports a more constructive reading: Bitcoin could be entering a historically attractive valuation zone. In other words, the market approaches a level where the excesses of the previous rise have already largely been erased.

This signal deserves even more attention as it appears in a paradoxical context. Despite the price weakness, US spot Bitcoin ETFs attracted 1.32 billion dollars in March. This suggests that part of institutional investors continue buying while the market doubts.

Why the Real Bottom May Not Yet Be Here

However, not everyone shares this optimistic view. For Andri Fauzan Adziima, head of research at Bitrue, current data mostly reflect growing pressure, not yet a total capitulation.

His argument is simple: at real cycle bottoms, market suffering usually becomes more extreme. In 2022, more than 50% of Bitcoin supply was at a loss, while several valuation indicators had reached much more severe stress levels. We are not there yet.

This nuance is important. It means that the market could still go through a long consolidation phase, or even a new bearish leg before a more durable recovery. Some analysts thus see a potential structural bottom around 55,000 dollars, without excluding further volatility.

Adding to this is a major macro factor: the US dollar remains too strong. Historically, Bitcoin often struggles to assert itself when global liquidity contracts. The rise of the DXY, geopolitical uncertainty, and expectations of high rates continue to attract capital to bonds and assets considered more defensive.

In short, it is not yet time to panic, but vigilance is necessary. The market is at a crossroads: on-chain data send real stress signals, but without reaching the historical extremes synonymous with a definitive bottom. The next Fed decision, or an unexpected geopolitical signal, could tip everything, one way or the other.