Bitcoin experienced one of its most severe selloffs in recent years on Thursday, triggering a wave of capitulation indicators that have historically appeared close to major market bottoms.
Bitcoin Price Crash Triggers Extreme Oversold Signals
The price of bitcoin fell sharply from around $73,000 to near $62,000 in a single session, marking a decline of roughly 14%. This was the steepest one-day drop since late 2022. Technical indicators quickly moved into extreme territory, with the Relative Strength Index reaching one of its lowest readings on record. At the same time, sentiment gauges collapsed, with fear indicators dropping into single digits, a level rarely seen over bitcoin’s history.
At the time of writting BTC is Trading near 68k.
Nearly 10 Million BTC Now Sitting at a Loss
On-chain data shows that close to 10 million bitcoin are currently held at a loss, making it the fourth-highest level ever recorded. Similar conditions were observed during previous cycle lows in 2015, 2019, and 2022. Long-term holders are also under pressure, with more than 4.5 million BTC held below cost basis, approaching levels seen at past bear market bottoms.
Notably, the amount of bitcoin in profit and loss has nearly equalized, a rare balance that has often coincided with major trend reversals.
While no indicator can confirm a precise bottom, bitcoin has already rebounded toward $68,000. Historically, such extreme capitulation events have tended to occur late in downturns, suggesting downside risk may be narrowing, even if further volatility remains possible.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.