Bitcoin, Longest 'Capitulation' Since FTX Collapse... But No Bottom Signal Yet

▲ Bitcoin (BTC)/AI generated image ©

Forty-five Bitcoin (BTC) price indicators are pointing to the longest 'capitulation' phase since the FTX collapse in 2022. However, analysis suggests it is too early to confirm a bottom based on current trends, as it has not reached the extreme levels of recession seen at previous bear market bottoms.

According to investment media FXStreet on August 5 (local time), Glassnode's Bitcoin Cycle Position Heatmap, an on-chain analytics firm, showed a capitulation zone throughout 2026. This indicator, developed by Glassnode co-founder Rafael Schultze-Kraft, aggregates 45 data points to show the overall health and cyclical position of the Bitcoin market.

On the heatmap, blue signifies capitulation, while red indicates overheating, close to a cyclical peak. After showing an overheating phase in November 2021, most of 2022 turned blue, and in November of the same year, with the collapse of FTX, Bitcoin hit a bear market low of $15,600. Schultze-Kraft explained that while the current period is the coldest since the FTX incident, it is not the full 'dark blue' state that confirmed past bottoms.

This indicator primarily reflects the profitability of short-term holders (STH) and long-term holders (LTH), along with basic price data such as market capitalization. However, it was also pointed out that indicators measuring periods of inactivity, such as dormancy (the time Bitcoin remains unmoved before being used in an on-chain transaction), can naturally increase over time due to the long-term holding base, requiring detailed interpretation for each market cycle.

On-chain activity surged after the Coldcard hardware wallet vulnerability attack. Glassnode analyzed that daily active addresses and entity-adjusted transaction volume exceeded statistical upper bounds, indicating a significant increase in network participation and economic throughput. According to CryptoQuant, transaction volume below 1 Bitcoin was 39,600 BTC on July 31, close to the 39,900 BTC recorded on November 16, 2022, immediately after the FTX collapse. However, despite the initial shock, capital outflow trends are gradually stabilizing, suggesting that market participants' resilience has been maintained.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*