Bitcoin Shows Turnaround Signs but No Confirmed Bottom as Inflation Risk Looms
Bitcoin is signaling a potential turning point, but experts say a durable bottom has not yet formed. On-chain metrics tracked by CryptoQuant—long-term holder (LTH) profitability, MVRV Z-score, NUPL and percentage of supply in profit—sit in a neutral “no man’s land” between a mid-cycle correction and a full market reset. LTH profits fell from 142% in October to near breakeven, yet remain short of the 30–40% loss margins historically associated with capitulation. The MVRV Z-score has not reached the historically oversold -0.4 to -0.7 range, and NUPL (~0.1) also implies limited unrealized losses compared with past bottoms.
Traders are awaiting delayed January CPI data after a hotter-than-expected jobs report that showed 130,000 new jobs; a surprise rise in inflation could entrench a higher-for-longer Fed outlook and pressure risk assets including BTC. Traditional banks (Goldman Sachs, Standard Chartered) forecast near-term downside—Standard Chartered sees BTC dipping toward $50k–$58k. Some market participants point to extreme Fear & Greed readings (11/100) and heavy accumulation around $60k as signs of potential seller exhaustion. Price action: BTC fell ~45% from its October 2025 peak (~$126k) and has hovered around mid-to-high $60k, briefly testing $60k then rebounding ~19% on a single-day accumulation spike.
Implications for traders: conditions remain ambiguous. Technical indicators hint at a possible bottom-forming process but lack the capitulation signatures that typically mark cycle lows. Macro data (CPI, labor, Fed policy) remains the likely catalyst for the next decisive move. Short-term traders should prepare for volatility around the CPI release; longer-term investors should watch LTH capitulation metrics (MVRV, NUPL) and realized cost baselines near ~$55k for clearer confirmation.
Neutral
The article presents mixed signals rather than a clear directional catalyst. On-chain metrics show Bitcoin is near inflection points seen in prior cycles but have not reached the extreme capitulation levels (LTH losses of 30–40%, MVRV Z in -0.4 to -0.7, or deep negative NUPL) that historically mark durable bottoms. Simultaneously, macro factors—chiefly upcoming CPI data and recent strong jobs growth—create the potential for renewed downside under a higher-for-longer rates scenario. Analyst forecasts from major banks calling for BTC in the $50k–$58k range add bearish near-term scenarios, while extreme fear readings and large accumulation around the $60k zone point to possible seller exhaustion and institutional buying that could stabilise prices.
Short-term impact: Elevated volatility is likely around the CPI release. A surprise uptick in inflation would probably trigger risk-off flows, producing bearish pressure and possible tests of the mid-$50k realized-cost area. Conversely, a benign CPI print could relieve rate-hike fears and support a relief rally.
Long-term impact: Without clear LTH capitulation and confirmation from valuation metrics (MVRV, NUPL), a durable multi-year bottom is not confirmed. If macro conditions stabilise and realized-cost baselines hold (near ~$55k), institutions may continue to accumulate, setting the stage for a sustained recovery. Historical parallels: 2018–2019 and 2022 bottoms showed deep LTH losses and clear MVRV/NUPL oversold readings before sustained recoveries. Because current indicators are intermediate, the market outlook is best classified as neutral—traders should prioritize risk management and watch both macro prints and on-chain capitulation signals for confirmation.