Despite improving market sentiment and Bitcoin’s recent rebound, some analysts believe the leading cryptocurrency could still be heading toward another major capitulation event.
Bitcoin briefly climbed above the $67,000 mark after news of a peace agreement between the United States and Iran sparked renewed optimism across financial markets. However, crypto analyst Doctor Profit cautions that the current market structure closely resembles the setup that unfolded before the dramatic collapse of FTX in 2022.
Echoes of the 2022 Capitulation
In a recent post, Doctor Profit explained that prior to the FTX crash, Bitcoin was steadily moving higher while forming a bullish divergence on the weekly chart. The signal encouraged many traders to accumulate positions near the $20,000 level, expecting a sustained recovery.
Instead, the market experienced a wave of panic selling after the FTX collapse, leaving investors nursing losses of roughly 20 percent.
According to the analyst, Bitcoin is once again displaying a bullish divergence on the weekly timeframe while attracting renewed buying interest. Although the setup appears constructive on the surface, he believes it could precede another sharp capitulation event before the market establishes its true bottom.
Optimism Returns, But Risks Remain
Bitcoin’s recent rally followed comments from United States President Donald Trump, who announced that Washington had finalized a peace agreement with Iran after months of heightened tensions.
Reports suggest the agreement includes reopening the Strait of Hormuz and removing the United States blockade affecting Iranian ports and shipping routes. While many details of the arrangement remain uncertain, Trump indicated that further negotiations between both nations would continue.
The development boosted investor confidence and helped lift Bitcoin higher, but analysts warn that improving sentiment alone may not eliminate the risk of another significant downturn.
On Chain Data Points to Unfinished Pain
Additional data shared by Alphractal founder Joao Wedson suggests that many Bitcoin investors are currently holding positions at a loss.
According to Wedson, Bitcoin has registered the second largest unrealized loss event in its history. However, realized losses remain relatively limited, indicating that widespread panic selling has yet to materialize.
He noted that the gap between unrealized and realized losses could be a warning sign. If investors begin exiting positions aggressively, the market could still experience a broad capitulation phase before reaching a definitive bottom.
Key Levels to Watch
Historically, Bitcoin’s major cycle bottoms have coincided with the CVDD metric, which has previously marked attractive accumulation zones before the start of new bull markets.
Crypto analyst Ali Martinez pointed out that the CVDD level currently sits near $48,000. Should Bitcoin undergo a deeper correction, this price area could emerge as a critical support level.
That outlook aligns with Doctor Profit’s earlier projections, which identified the region between $40,000 and $48,000 as a potential final bottom zone for Bitcoin during the current market cycle.
While Bitcoin’s latest rally has restored optimism among traders, some analysts remain cautious, arguing that the market may still need to endure one final washout before a more sustainable recovery can take hold.#crypto#cryptonews https://coinsignals.net https://t.me/coinsignalpublic
