This Bitcoin Indicator Mapped the Bottom of the Last Bear Market. Here’s What to Expect this Time ⋆ ZyCrypto

A closely watched on-chain indicator that accurately mapped the bottom of the previous Bitcoin bear market is drawing fresh attention as analysts assess how far the current downturn could extend.

Bitcoin is trading near $66,816 after posting a 17% decline this year, pressured by a convergence of opposing forces. These include roughly $12 billion in institutional ETF outflows over the past three months, heightened global risk aversion, and the absence of clear regulatory tailwinds.

While these dynamics have fueled persistent selling, they may also be laying the groundwork for a future reversal as large players prepare to re-enter at more attractive levels.

The focus has now shifted toward identifying a credible accumulation zone, the price region where selling pressure historically exhausts itself, and long-term capital begins to return.

CryptoQuant highlights its BTC Market Cycle Signals indicator as a critical tool in this process. The model interprets Bitcoin’s macro cycle as comprising three distinct phases, identified using monthly Bollinger Bands. Distribution occurs when price interacts with the upper band during periods of euphoria.

That said, capitulation follows as the price falls through the 20-month moving average and gravitates toward the lower band amid panic. Moreover, accumulation is the phase when conditions favor strategic buying, even if the absolute bottom has not yet been confirmed.

According to current readings, Bitcoin’s price action is converging toward the band that historically marks the transition from Capitulation to Accumulation. This zone is around $54,600 and is emerging as the primary candidate for the bottom of the ongoing bear market. In the prior cycle, this same indicator successfully highlighted the point at which downside momentum faded and long-term positioning began.

Meanwhile, the total crypto market cap has dropped 3.09% over the past 24 hours to $2.28 trillion, driven primarily by institutional accumulation. Crypto markets are also showing a 95% correlation with the S&P 500, underscoring a macro-driven attempt to recover from extreme fear.