Onchain analytics provider Glassnode announced that Bitcoin has entered its longest stretch of capitulation since the end of the 2022 bear market. According to the company’s latest update, a broad range of Bitcoin price metrics is signaling prolonged market weakness not seen since the significant downturn following the collapse of FTX.
USDT
AAPL45 Bitcoin price indicators reflect extended downturn
Glassnode uses a proprietary model called the Bitcoin Cycle Position Heatmap, which compiles data from 45 different price and onchain metrics to assess overall market sentiment and cycle positioning. The tool was developed by Glassnode co-founder Rafael Schultze-Kraft to monitor cyclic trends within the Bitcoin market.
Periods are visually categorized by color: blue reflects “capitulation,” marked by investor pessimism and selling pressure, whereas red signals periods of euphoria, typically associated with price surges toward market cycle highs.
After a euphoric peak in late 2021, the heatmap transitioned to blue through much of 2022, capturing the extensive capitulation after FTX’s collapse. At that time, Bitcoin’s price bottomed near $15,600, marking one of the pivotal lows of the last cycle.
Currently, the heatmap indicates the coldest stretch since the FTX collapse, signaling the late stage of the bear market but stopping short of the deep blue seen at previous market bottoms, Schultze-Kraft explained.
Despite persistent market weakness, Schultze-Kraft pointed out that overall sentiment has not reached the deep capitulation levels often recorded at the exact bottom of bear cycles in the past.
Investor profiles and cycle interpretation
The Heatmap integrates not only standard price metrics such as market capitalization but also divides the investor base into short-term and long-term holders to gauge profit and loss dynamics across different segments.
Schultze-Kraft emphasized that some indicators, like dormancy — a measure of how long Bitcoin units remain unmoved before being spent in a transaction — have evolved as the broader investor base matures. Increased dormancy over time reflects changes in holding patterns, making it necessary to interpret these metrics within their broader cycle contexts.
Mini dictionary: Dormancy – Dormancy refers to the average period that coins remain inactive on the blockchain before moving. Higher dormancy often indicates that long-term holders are moving coins, potentially signaling major market shifts.
Over time, Glassnode has noted that interpretation of these metrics requires adjustments, as each Bitcoin market cycle brings structural changes in investor behavior.
Network activity and recent transaction trends
In its latest Market Pulse report, Glassnode observed increased onchain engagement, with both daily active addresses and entity-adjusted transfer volumes exceeding previous statistical bands. The company highlighted that these trends indicate notable network activity and stronger economic movement within Bitcoin’s ecosystem.
Capital outflows among investors remained generally stable, even after concerns sparked by a recent bug exploit in Coldcard hardware wallets caused a brief reaction among some users. Nonetheless, this did not lead to a substantial shift in overall market structure.
Comparisons to previous market events
CryptoQuant, another blockchain analytics provider, identified that the volume of transactions involving 1 BTC or less mirrored patterns seen after the FTX incident. On July 31, these transactions amounted to 39,600 BTC, close to the peak volume observed on November 16, 2022, when 39,900 BTC changed hands in a single day following heightened market stress.
| Date | Transactions ≤ 1 BTC | Market Context |
|---|---|---|
| July 31, 2026 | 39,600 BTC | Ongoing capitulation phase |
| Nov. 16, 2022 | 39,900 BTC | FTX post-collapse aftermath |
These figures underscore the persistence of cautious sentiment and reflect similarities between the current environment and previous episodes of acute market stress.
