Bitcoin continues to face heavy selling pressure, but several long-term indicators are beginning to suggest that the cryptocurrency may be approaching a major market bottom, according to a recent analysis from Fidelity Digital Assets.
The asset manager noted that while short-term conditions remain bearish, a number of historical metrics are moving into zones that have previously coincided with the final stages of bear markets.
Bear Market Conditions Remain Intact
According to Fidelity’s research team, Bitcoin has remained under a “death cross” for more than 200 days, a technical condition that occurs when a shorter-term moving average falls below a longer-term one and is often viewed as a sign of prolonged weakness.
The analysts also highlighted Bitcoin’s recent drop below its 200-week moving average, a level widely regarded as one of the market’s most important long-term support zones.
Historically, extended periods below this benchmark have often occurred during major liquidation events and forced selling episodes, including the severe downturn experienced in 2022.
The report argues that such conditions are often associated with the final capitulation phase of a bear market, when investors surrender positions after months of losses.
Bitcoin has also retraced roughly 50% from its cycle peak, although previous bear markets have generally produced even deeper corrections before reaching their ultimate lows.
Valuation Metrics Suggest Growing Undervaluation
Fidelity observed that Bitcoin’s Market Value to Realized Value ratio, commonly known as MVRV, is moving toward levels that have historically indicated undervaluation.
At the same time, the asset’s market price is approaching its realized price of approximately $53,600, which represents the average acquisition cost of all Bitcoin currently in circulation.
According to the analysts, this trend could indicate that a broader market reset is taking place beneath the surface, potentially laying the groundwork for future recovery.
Fear Remains Elevated
Investor sentiment also remains deeply negative.
While market fear has reached extreme levels, Fidelity noted that current readings have not yet fallen as low as those recorded earlier this year. Even so, the combination of depressed sentiment and declining valuations suggests that Bitcoin is entering territory often associated with long-term opportunities.
The firm concluded that short-term indicators continue to point toward further downside risk, but longer-term signals are beginning to improve.
Analysts See Capitulation Taking Shape
Research firm Swissblock believes Bitcoin is currently undergoing a capitulation phase, with momentum indicators reaching deeply negative levels.
According to the firm, meaningful market recovery will likely require momentum to move back above critical thresholds before a sustainable uptrend can emerge.
Until then, analysts caution that the market remains vulnerable and that the current base-building process is still fragile.
Similarly, analysts at 10x Research said that while the broader market is unwinding, Bitcoin appears to be establishing a foundation for future gains.
They pointed to several ongoing challenges, including declining Bitcoin dominance, shrinking stablecoin reserves, and continued concerns surrounding large corporate holders such as Strategy.
Despite these headwinds, the firm expects higher Bitcoin prices later in the year as regulated derivatives markets continue to expand and institutional infrastructure matures.
Bitcoin Enters Consolidation Phase
After briefly recovering to $64,000 on Monday, Bitcoin struggled to maintain upward momentum and slipped back toward $62,500 during Asian trading on Tuesday.
The asset has now spent several days trading within a relatively narrow range, suggesting a consolidation phase may be underway.
Some analysts believe Bitcoin could remain trapped within this price zone for an extended period, similar to the lengthy sideways trading pattern observed between March and October 2024.
While uncertainty remains high, the growing divergence between bearish short-term sentiment and improving long-term indicators is fueling speculation that Bitcoin may be entering the early stages of a bottoming process rather than the beginning of another major decline.#crypto#cryptonews https://coinsignals.net https://t.me/coinsignalpublic
