Bitcoin experienced a notable downturn on Thursday, with its price falling below $69,000 for the first time since November 6, 2024. This decline has led analysts to suggest that the cryptocurrency might be demonstrating signs of “full capitulation,” with a potential market bottom in the making amid extreme fear and panic selling among short-term holders.
In the past 24 hours, short-term holders—defined as those who have held Bitcoin for less than 155 days—sold nearly 60,000 BTC, valued at approximately $4.2 billion at current prices. This surge of sell-offs represents the largest inflow of Bitcoin into exchanges this year, amplifying the selling pressure on the market. CryptoQuant analyst Darkfost indicated that this scenario reflects a clear capitulation, noting that the severity of the correction has led long-term holders to refrain from moving any Bitcoin at a profit.
Additional metrics reveal that the realized losses among Bitcoin investors have significantly escalated, with a 7-day simple moving average surpassing $1.26 billion per day. This increase signifies heightened market fear and is historically indicative of moments when seller exhaustion peaks. “Historically, spikes in realized losses often coincide with moments of acute seller exhaustion, where marginal sell pressure begins to fade,” observed Glassnode, adding that the capitulation metrics have displayed one of the largest spikes seen in two years, a situation often associated with heightened volatility and the reassessment of market positions.
Contributing to this bearish sentiment, the Crypto Fear & Greed Index marked an alarming score of 12, categorizing the overall market sentiment as one of “extreme fear.” The last time levels were this low was on July 22, just before Bitcoin experienced a price slump to $15,500, followed by a subsequent bull run. Analyst Davie Satoshi noted in an X post that such levels have historically been followed by recoveries, encouraging investors to consider buying during this period of extreme fear.
Furthermore, Bitcoin’s relative strength index (RSI) is now considered “most oversold” across multiple timeframes. The RSI stands at 18 for the 12-hour chart, 20 for the daily, and 23 for the four-hour, while the weekly RSI is reported at 29—the lowest since the 2022 bear market. Analysts suggest that the current RSI levels, reminiscent of those witnessed during the major capitulation phase around $16k in 2022, signify a risk/reward scenario favoring potential buyers. CryptoXLARGE remarked that this dramatic overselling by investors reflects panic-driven decisions, stating, “Historically, this is where fear peaks and opportunity begins.”
Overall, the current market sentiment illustrates a collective anxiety among Bitcoin investors, marked by significant sell-offs, extreme fear indicators, and oversold conditions in technical metrics, all of which could potentially signal a fleeting opportunity for strategic investors as they navigate the tumultuous cryptocurrency landscape.
