Bitcoin Shows Warning Signs of Capitulation, But VanEck Says It’s Too Early to Call a Bottom

Asset manager VanEck says bitcoin is currently displaying eight out of twelve signals it associates with market capitulation, the point where selling pressure typically peaks before a recovery begins. According to the firm’s mid August market update, all twelve indicators have been triggered at some point over the past three months. These metrics track things like how far bitcoin has fallen from its previous high, how strained miners’ finances are, and how many holders are currently underwater on their positions.

Historical Pattern Suggests Patience, Not Excitement

Looking back at previous instances when eight or more of these signals lit up together, bitcoin’s average return over the following three months was 12.8%, and 32% over six months, both weaker than its typical historical performance. Only when looking a full year out did returns following these signals outperform bitcoin’s usual baseline, suggesting this isn’t a setup that rewards short-term optimism.

Current Drawdown Milder Than Past Crashes

Bitcoin currently sits about 49% below its record high, a smaller decline than previous major crashes of 94%, 85%, 84%, and 78%, all of which occurred before spot ETFs existed and before institutional investors held meaningful positions in the asset. Those earlier crashes also coincided with high-profile collapses like Celsius and FTX.

Miners Bearing the Brunt of the Downturn

Network-wide mining revenue has dropped 46% over the past year, while mining difficulty has fallen more than 18% from its late-2025 peak, marking the sharpest decline since China’s 2021 mining crackdown, as unprofitable operations shut down.

ETF Demand Shows Signs of Recovery

Despite the broader pullback, US spot bitcoin ETFs have pulled in roughly $663 million over the past month, reversing much of the previous month’s outflows, even as overall trading volume remains historically low.

VanEck notes that based on past market cycles, bitcoin may be entering its later stages of decline, with an eventual bottom potentially forming sometime between September and November, though the firm stopped short of naming a specific timeframe.