Bitcoin nears zone where past bear markets have bottomed out

Synopsis

Bitcoin’s steep decline since October may be nearing its final phase, according to Blockforce Capital’s Brett Munster, who tracks key on-chain indicators. Metrics such as the MVRV Z-Score and realized price suggest the cryptocurrency could be entering a potential accumulation zone, with renewed ETF inflows signalling improving investor demand.

Bitcoin has lost almost half its value since October, and a set of indicators that have historically marked the end of past downturns suggest the selloff could be entering its final phase, according to a crypto fund manager who has invested through three prior boom-and-bust cycles.

Brett Munster at Blockforce Capital tracks four measures to gauge where Bitcoin stands in its crash cycle. One has already crossed into territory associated with past lows. Two others converge near $54,000 to $58,000 — still below Bitcoin’s current price of about $73,800. And the token briefly touched $60,000 in February before rebounding, meaning it has already grazed the upper edge of what Munster considers a probable bottoming zone.

That gap — between where Bitcoin trades now and where his remaining metrics fully trigger — might seem like a reason for caution. Munster argues it isn’t. In the last bear market, the difference between buying at $19,000 and catching the ultimate bottom at $15,600 proved negligible for anyone who held over multiple years. His advice now is the same: scale in gradually rather than wait for the perfect entry.

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View Details »While a floor isn’t guaranteed, “the majority of the drawdown appears to be behind us, and the asymmetry is shifting,” he said, adding that a potential turnaround could come about mid-year. On Friday, Bitcoin was up about 2.4% to trade around $71,800 shortly after noon in New York.

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The measure already flashing is the so-called MVRV Z-Score, which signals when Bitcoin trades above or below its on-chain cost basis. When it falls below 0.4, the coin has tended to trade at undervalued levels. Today it sits at roughly 0.38. The other indicators aren’t there yet.

Realized price — the average price at which each Bitcoin last moved on-chain — currently stands near $54,000. The 200-week moving average, a support level that has helped mark lows in prior cycles, is around $58,000. And the pattern of diminishing peak-to-trough drawdowns — often seen as a sign that the asset class is maturing as liquidity and participation deepen — suggests a potential bottom between $45,000 and $55,000.

Together, the four point to what Munster calls “a high-probability accumulation zone between approximately $45,000 and $60,000.”

Even if selling fades, a sustained recovery needs fresh demand — and there are early signs it’s arriving. US-listed spot Bitcoin exchange-traded funds have been attracting cash once more following months of withdrawals. More than $1.6 billion has come into funds including BlackRock’s IBIT and VanEck’s HODL over the past month, data compiled by show. “Once selling pressure fades, even modest new inflows can move the market,” Munster said.

It’s welcome news to Bitcoin bulls who have been battered for months. The largest cryptocurrency dropped from more than $126,000 after an early October crash that rattled retail traders and dampened optimism about crypto-friendly policy shifts under the Trump administration. Other smaller tokens have suffered even worse.

Determining a bottom is never an exact science, and bear markets can grind on even when technical signals suggest otherwise. Still, Munster says Bitcoin offers a more asymmetric opportunity to the upside than the downside — and that trying to time the final few percentage points of a decline usually means missing the broader move.

“Over the long run, investors who accumulate during periods like this are typically rewarded even if they don’t catch the exact bottom,” he said.

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