Here’s why Bitcoin analysts say the BTC market has entered “total capitulation”

Bitcoin (BTC) sellers resumed their activity on Thursday while BTC price fell below $69,000the lowest since November 6, 2024.

Analysts said Bitcoin was showing signs of “complete capitulation” and potential for a bottom to form, due to extreme market fear, panic selling by short-term holders and the Relative Strength Index (ROI).

Key points to remember:

• Short-term Bitcoin holders sold almost 60,000 BTC in 24 hours.

• The Crypto Fear & Greed Index shows “extreme fear,” signaling a potential bottom.

• Bitcoin’s “most oversold” RSI indicates seller exhaustion.

The capitulation of short-term holders increases

Nearly 60,000 BTC, worth around $4.2 billion at current rates, held by short-term holders (STH) or investors who have held the asset for less than 155 days, moved to exchanges at a loss in the past 24 hours, according to data from CryptoQuant.

This is the largest foreign exchange inflow since the start of the year, contributing to the selling pressure.

“The correction is so severe that no BTC profits are being displaced by LTH,” CryptoQuant analyst Darkfost said in a post on X, adding:

“It’s a total surrender.”

Analyzing the volume of coins spent at a loss, Glassnode found that the 7-day SMA of realized losses exceeded $1.26 billion per day.

This reflects a “marked increase in fear,” Glassnode said, adding:

“Historically, peaks in realized losses often coincide with moments of acute seller burnout, where marginal selling pressure begins to fade.”

Bitcoin’s capitulation measure also “printed its second largest spike in two years,” events that have already coincided with accelerated de-risking and elevated volatility as market participants reset their positioning, Glassnode said.

‘Extreme fear’ could signal market bottom

The Fear and Greed of Cryptocurrencies Hintwhich measures general crypto market sentiment, posted an “extreme fear” score of 12 on Thursday.

These levels were last seen on July 22, a few months before the BTC price bottomed at $15,500 and then embarked on a bull run.

Data revealed that in all capitulation events where the index reached this extreme level, short-term weakness was common, but almost all events produced a rebound.

“We are at a level of “extreme fear” with a crypto fear and greed index of 11,” said analyst Davie Satoshi in an article on Thursday, adding:

“History has shown that now is the time to buy and accumulate more! »

Santiment crypto sentiment platform said in an X article on Thursday, investor sentiment has “become extremely bearish towards Bitcoin.”

“This remains a strong argument for a near-term rally as long as the small group of traders continues to show disbelief in the cryptocurrency as a whole.”

“Most Oversold” Bitcoin RSI Signals Seller Exhaustion

CoinGlass Heatmap shows that BTC’s RSI displays oversold conditions in five out of six periods.

Bitcoin’s RSI is now at 18 on the 12-hour chart, 20 on the daily chart, and 23 on the four-hour chart. Other intervals also display oversold or near-oversold RSI values, such as 30 and 31 on the weekly and hourly time frames, respectively.

In fact, TradingView data shows the weekly RSI is at 29 on Thursday, the “most oversold” since the 2022 bear market, according to analysts.

“Bitcoin is now the MOST oversold since the FTX crash”, CryptoXLARGE said in an article on Wednesday, adding that this reflects panic selling among investors.

“Historically, this is where fear peaks and opportunities begin,” the analyst added.

Bitcoin’s RSI is at the same oversold levels last seen around $16,000 in 2022, which marked the “last major capitulation” phase. said analyst HodlFM in a recent article on X, adding:

“This is not a timing signal per se, but historically this is where the risk/reward ratio favors buyers.”