Analysts Say Bitcoin Is Forming A “Textbook” Market Bottom

Bitcoin appears to be tracing out a classic bear market bottom, according to onchain analysis pointing to signals last seen at the end of the 2022 downturn, as short-term holders begin realizing profits on recent price recoveries.

Moving Average Signals Match Past Bottoms

Bitcoin’s 200 week simple moving average and its associated quantile bands, noting that price has returned to the same reversal zone that marked bottoms during the 2022 bear market and the March 2020 COVID crash. The current setup as a textbook bottom, arguing nearly every major bottom signal has now triggered or is close to triggering.

Short-Term Holders Show Encouraging Behavior

Another positive sign comes from short term holder data, specifically the spent output profit ratio, which tracks whether coins held for under six months are moving at a profit or loss. That metric recently turned positive, indicating short-term holders are now selling at a gain rather than a loss, a pattern typically associated with healthier market conditions.

Some Analysts Remain Cautious

Not everyone is fully convinced the bottom is confirmed. CryptoQuant noted that in past major bottoms, the same short-term holder metric usually fell much lower, closer to 0.93, as holders capitulated and sold at steep losses. Since current readings haven’t reached that deeper level, the platform suggests the market has cooled but hasn’t yet shown a full capitulation signal.