Bitcoin was under strong selling pressure for several days, dropping to the $85,000 zone before attempting a modest recovery. This drawdown has shaken market confidence, but the violent capitulation currently being seen from Bitcoin holders suggests the market may be forming a bottom.
Prices are stabilizing around key psychological levels, but this stabilization has come at the expense of widespread holder abandonment, a classic bottom signal.
Bitcoin traders and investors are letting go
Macro momentum indicators indicate that the Bitcoin market risk forecast is actively changing. The 25 delta skew is pushing deeper into put territory across all maturities, indicating that traders are increasingly paying for downside protection. Short-term options remain the most skewed, but the notable change is the longer expiration dates.
The 6-month put has increased by 2 volatility points in just one week, highlighting a move towards structurally bearish positioning. Traders are now pricing in both immediate downside risk and the possibility of an even bigger decline.
This pattern typically appears near the bottom zone of a major business cycle, as the market overshoots downward before returning to equilibrium.
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25D skew in Bitcoin options. Source: Glassnode
Realized losses for Bitcoin holders have soared to levels not seen since the FTX collapse. Most of this decline was driven by short-term holders, reflecting recent panic selling by buyers that built up near the highs. The magnitude and velocity of these realized losses indicate that marginal demand has been completely exhausted.
This type of aggressive deleveraging historically marks the final stage of a recession. Once short-term holders release their funds en masse, long-term holders typically step in and an accumulation zone begins to form.
This is consistent with classic rock bottom behavior of capitulation before recovery.
Bitcoin realized losses. Source: Glassnode
BTC price may rebound
At the time of writing, Bitcoin is trading at $85,979, above the $85,204 support level and sticking to the psychological floor at $85,000. The combination of capitulation, bearish bias, and large realized losses suggests that a market bottom is near or has already formed.
If this bottom is confirmed, Bitcoin could rebound and break through the $86,822 resistance. Above that level, it could rise to $89,800 and then $91,521. Clearing these barriers could revive bullish sentiment and push BTC closer to $95,000 in the short term.
Bitcoin price analysis. Source: TradingView
However, if bearish pressure increases and the macro environment does not improve, Bitcoin could fall below $85,204. A decline below $82,503 could cause the price to fall further towards $80,000, invalidating the bullish theory and delaying the recovery.
The post Has Bitcoin bottomed out? What the data says about the rebound appeared first on BeInCrypto.
