Bitcoin’s Bottoming Process May Not Be Complete Yet

Data from Glassnode suggests that Bitcoin is moving closer to a bear market bottom, but the process appears unfinished.

The chart tracking Bitcoin supply in profit versus supply in loss shows that, despite the recent drawdown, a substantial portion of circulating supply remains in profit. Historically, definitive bear market bottoms have tended to form only after a much larger share of supply shifts into loss, signaling widespread capitulation and the exit of weaker hands.

At present, that full transition has not yet occurred.

Why Supply in Profit Still Matters

True market bottoms are rarely marked by price alone. Instead, they emerge when investor positioning and psychology reset. In prior cycles, this reset coincided with periods where profitability collapsed, forcing late-cycle buyers to realize losses and long-term holders to endure sustained drawdowns.

In the current structure, the chart shows that while supply in loss has risen, it has not yet dominated. Too many coins are still held above their cost basis, indicating that systemic stress has not fully peaked.

This imbalance suggests that selling pressure may not be fully exhausted.

Late-Stage Bear Market Dynamics

The current configuration aligns more closely with late-stage bear market behavior rather than a confirmed bottom. These phases are typically characterized by prolonged consolidation, repeated volatility spikes, and incremental increases in supply moving into loss rather than a single, clean capitulation event.

Historically, this is the part of the cycle where patience matters most. Bottoms form through time, attrition, and emotional fatigue, not precise price levels.

Closer Than It Feels But Not There Yet

The data does not suggest that Bitcoin is far from a bottom. On the contrary, the growing share of supply in loss indicates meaningful progress through the reset process. However, the absence of a deeper, more dominant loss regime implies that the final flush may still lie ahead, whether through additional downside, extended sideways action, or both.

Markets tend to demand one last phase of pressure to fully dislodge remaining optimism.

A Contrasting View: Signs the Bottom Could Already Be Formed

However, not all analysts agree that Bitcoin’s bottoming process still requires further downside or extended consolidation. According to Trader Tardigrade, who shared a long-term monthly Bitcoin chart, the market may have already completed the bottom of its current pullback.

His analysis highlights a recurring historical pattern where a breakdown in the monthly RSI is followed by a roughly 12-month corrective phase, after which Bitcoin transitions into a new impulsive advance. In the chart, previous pullbacks of similar duration are clearly marked, each resolving near the end of a 12-bar structure before a fresh impulsive move begins.

Based on this recurring behavior, Trader Tardigrade suggests that Bitcoin is now approaching the same transition point, arguing that the next impulsive move may be imminent rather than still months away.

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