BEARISH 📉 : Bitcoin traders face pressure from ETF sell-off and leverage reset

Bitcoin is at a critical juncture, with opinions divided between a potential full capitulation or the start of a durable bottoming process. Analyst Maartunn suggests that while signs indicate a potential bottom might be forming, it is likely to be gradual rather than immediate.

Key Points

Bitcoin is trading approximately 50% below its all-time high, which is less severe than past bear market declines exceeding 70%.
The focus is on whether indicators of a market turnaround are emerging.
Spot ETFs have seen an $8.2 billion drawdown from peak holdings, creating significant selling pressure.
The price is about 17% below the average buying price for ETF holders, potentially prompting them to reduce exposure.
Open interest in derivatives has dropped significantly, indicating a broad deleveraging event that may help form a market bottom.
The short-term holder MVRV ratio at 0.72 suggests high financial stress, historically associated with major capitulations.
The current structure retests a major support zone, often significant in past cycle transitions.
Bottoms are typically not single-day events; they involve phases of structural selling, leverage flush, and sentiment shifts.

Maartunn concludes that while early bottom formation signals may be appearing, confirmation will unfold over time, accompanied by volatility and further stress tests.

At press time, Bitcoin traded at $68,710.