Bitcoin has once again triggered alarms in the financial sector after sinking below $69,000, reaching its lowest level since late 2024. Analysts agree that the market is going through a full capitulation phase, characterized by extreme fear sentiment and seller fatigue that, historically, usually precedes the formation of a solid macro floor for the leading digital asset’s price action.
According to the latest CryptoQuant reports, short-term holders have transferred nearly 60,000 BTC to exchanges in just 24 hours, accepting significant losses on their positions. This massive behavior, typical of a full capitulation phase, reflects a forced exit of speculative capital, which curiously alleviates future selling pressure by leaving the asset in the hands of long-term holders with higher conviction.
Sentiment indicators and the exhaustion of market sellers
This scenario is further supported by the Crypto Fear & Greed Index, which on Thursday posted an “extreme fear” score of 12. Therefore, the leading cryptocurrency shows signs of structural exhaustion, as daily realized losses have exceeded $1.26 billion, reaching levels of panic not seen since the liquidity crises of previous years during the last bear cycle.
Furthermore, the Relative Strength Index (RSI) has dropped to deep oversold levels across multiple timeframes, hitting values not recorded since the FTX collapse. Nevertheless, this bearish saturation is seen by experts as an opportunity, as the risk of further sharp declines diminishes once most marginal traders have been liquidated, allowing for an eventual price stabilization and market reset.
Could the current RSI anticipate an imminent rebound toward the $80,000 mark?
From a technical perspective, the weekly RSI at 29 suggests that Bitcoin is more oversold than at any other point in the current market cycle. To validate a recovery, the asset must hold critical support at $68,000, thus avoiding an extension of the correction toward the $55,000 zone, where the most significant long-term moving averages for institutional investors are currently located.
However, the success of a potential relief rally will depend on whether ETF outflows begin to reverse in the coming trading sessions. If the sentiment of disbelief persists among retail traders, a massive short squeeze could be triggered, driving the price rapidly upward as short sellers are forced to cover their positions in the face of renewed buying demand and limited supply.
On the other hand, history suggests that moments of maximum pessimism are those that offer the best risk-reward ratio for strategic buyers. Also, the resilience of long-term holders, who refuse to sell at these levels, acts as a vital containment wall, laying the groundwork for Bitcoin to reclaim its digital store of value narrative in the medium term as volatility subsides.
