With Bitcoin’s price holding on, is its capitulation still ‘incomplete?’

Bitcoin’s decline began after its price cooled from six-figure highs towards the $80,000 to $70,000 range, driven by profit realization and weakening inflows. As selling expanded, Bitcoin [BTC] approached the key on-chain support. However, it has since remained about 18% above the $55,000-realized price.

Historically, Bitcoin trades 24–30% below this level during bear market washouts. That threshold has not been reached yet, which explains why full capitulation has not formed yet.

As price pressure developed,  the NUPL fell towards the 0.20–0.30 zone. This drop occurred as unrealized profits compressed. However, it remained above 0.0 or the negative levels seen at prior bottoms – A sign that panic loss distribution has not occurred.

At the same time, the MVRV eased towards 2.0 as valuations cooled. This decline reflected profit reduction, yet it stayed well above the sub-10 capitulation band. Since holders remained broadly profitable, forced selling remained limited, enabling BTC to stabilize while forming a longer base before recovery.

Capital absorption weakens beneath Bitcoin’s elevated price base

Capital expansion supported Bitcoin’s structural rally through 2023 and early 2024, as Realized Cap Impulse held firmly above +2.0. During this period, the price rose from sub-$30,000 towards $70,000 and then to the $100,000-range – A sign that gains were backed by real capital inflows.

ETF inflows and institutional allocations injected billions, while long-term holders absorbed the circulating supply. This balance hinted at strong confidence and steady demand capable of sustaining higher valuations.

As the cycle matured into late 2025, the momentum began to slow. Impulse peaks declined from above +4.5 towards +2.0, even as the price remained near $100,000.

This divergence revealed that new capital was entering at a slower pace. Profit realization gradually replaced fresh accumulation, weakening demand absorption.

As expansion cooled further, impulse compressed towards 0.0 before turning negative in early 2026. This signaled structural capital contraction. With the supply still present, the price softened towards the $85,000–$90,000 range, reflecting reduced demand strength.

However, re-acceleration now depends on renewed ETF inflows, long-term accumulation, and macro liquidity expansion. All while sustained inflow deterioration could prolong corrective conditions.

On-chain stress signals mature cycle contraction

Holder profitability compression defines the correction’s structural depth. At the time of writing, about 50% of the supply remained in profit, showing that unrealized gains had thinned with demand buffers weakened too.

The STH-MVRV near 0.95 confirmed recent buyers held losses, explaining panic-driven selling. On the contrary, the stable LTH realized cap suggested that long-term conviction was intact.

Spending behavior, thus, can be seen as illustrative of this stress transfer. Realized losses surged as STHs sent >100,000 BTC to exchanges, marking forced distribution. However, rising Accumulation Trend Scores alluded to the emergence of dip-buying absorption.

Finally, exchange flows usually frame liquidity conditions. Capitulation inflows appeared during dips, yet episodic outflows suggested the tightening of the supply. Meanwhile, ETF outflows and thinner spot volumes reinforced a defensive consolidation regime awaiting renewed capital inflows.

Final Thoughts

• Bitcoin’s correction hinted at structural cooling, not capitulation, as weakening inflows and profit compression eroded demand above realized support.
• A hike in short-term stress met emerging accumulation, leaving recovery dependent on renewed capital and liquidity expansion.