Losses in the Bitcoin market may signal a turnaround.

Recent movements in Bitcoin prices have created significant concern among investors. The rapidly increasing loss realization by short-term investors may indicate that the market is nearing the end of its downward phase. CryptoQuant analysts report that a sharp short-term capitulation period for Bitcoin is still ongoing based on current data.

Analysts emphasize that the losses occurring with respect to Bitcoin suggest it is not the beginning of a new decline but rather the final phase of a cyclical correction. The STH SOPR metric, which reflects the behavior of short-term investors, has fallen to approximately 0.97, indicating it has entered the loss territory again. This ratio has stayed below 1.0 for weeks, showing that the market is trapped within a capitulation band.

Historical data reveals that investors typically resort to panic selling in this region, and this behavior tends to be fear-based rather than deliberate. Similarly, the STH MVRV has dropped well below 1.0. This situation shows that nearly all investors who made purchases recently are currently at a loss. The rare deep loss environment in the dataset is rapidly compressing the selling pressure, as a significant portion of weak investors are liquidating their positions.

While fear prevails in the markets, another important data point shared by the CryptoQuant analyst is the 65,200 Bitcoin transferred to exchanges at a loss. This volume indicates that fear is not just a potential risk, but has actually turned into realized losses. The process is progressing in a way that closely aligns with a classic capitulation model. Initially, unrealized losses increase, panic sales accelerate, and the selling pressure becomes unsustainable. Eventually, strong investors begin to accumulate supply.

CryptoQuant analysts point out that although current market conditions do not guarantee an abrupt rise, the fundamental conditions seen before cyclical recoveries are increasingly overlapping. The historical levels of STH losses, the sustained SOPR value below 1.0, intense stress on MVRV, and fear-driven entries into exchanges indicate that recovery signals are beginning to accumulate. Analysts emphasize that volatility may continue, but the weak hands have largely been eliminated, which historically signifies the latter stages of downtrends.