Bitcoin has regained the $70,000 mark and is currently trading at $70,932 with a 1.05% decline in the last 24 hours following a turbulent Q1. However, key on-chain indicators suggest that the market is in a bottoming process, but not a verified cycle low.
One of the key metrics that predicted every cycle bottom is the long-term holder (LTH) supply in loss; this metric measures how much supply held by long-term investors is at a loss. Long-term holders have held BTC for at least 155 days.
In the past, this measure has coincided with major cycle bottoms. In the 2015 bear market, around 53% of the long-term supply was at a loss, with the bottoms of 2018 at 45% and 2022 at 44%.
These levels were times of peak capitulation, when the weak hands were forced out, and long-term investors were taking up supply.
The LTH supply in loss is currently around 29% and far lower than the historical bottoms. Although the trend upwards means that holders are becoming more stressed, it also implies that the market is yet to experience the deep capitulation that is usually experienced at the bottom of the cycle.
The Crypto Fear and Greed Index is at 43, which is in the neutral range. This indicates that neither bulls nor bears have a lot of conviction, and investors are waiting to have clearer directional indicators.
Although Bitcoin is currently priced over $70,000, a significant psychological price, the lack of buying momentum indicates that the ongoing recovery can be weak.
Technically, Bitcoin is trading above its 50-day Exponential Moving Average (EMA) at $70,752, while remaining capped by a parallel channel.
Momentum indicators show a mixed picture. The Relative Strength Index (RSI) of 52.82 indicates mild bullishness without going into overbought, whereas the MACD is positive, but the momentum is less than that of the previous rallies.
On the upside, immediate resistance can be seen at $72,576, which is the upper limit of the channel. A strong daily close above this could initiate a shift to the 100-day EMA at $75,291, followed by the 200-day EMA at $83,087.
On the negative side, a downward move below the 50-day EMA may reveal the lower border of the channel around $65,872.
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The mismatch between price recovery and on-chain metrics is a notable dynamic: as Bitcoin stays above $70,000, it may also be the case that the underlying circumstances leading to a confirmed cycle bottom are being established.
Further growth in the holders' losses in the long-term, and increased accumulation signals would probably be required to reflect the historical bottom structure.
Also Read: Bitcoin Could Become Quantum-Safe Without an Upgrade, But at a Cost
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