Glassnode's co-founder, Rafael Schultze-Kraft, has indicated that Bitcoin has entered a capitulation phase, which has now lasted longer than any period since the FTX exchange collapse. The analysis is based on a comprehensive index of 45 on-chain metrics.
Schultze-Kraft highlighted the Bitcoin Cycle Position Heatmap, which uses color coding to illustrate market conditions. Blue represents capitulation, while red indicates euphoria. Presently, the heatmap shows a predominantly blue phase, marking the coldest period since the FTX incident, although it has not yet reached the deep blue typically associated with market bottoms.
In previous cycles, such as in 2022, metrics transitioned to negative following the market highs of November 2021, remaining in that state until the FTX fallout in November 2022, which aligned with a Bitcoin price low of $15,600. Schultze-Kraft remarked, "Today, the indicator is in its coldest phase since the FTX bankruptcy, late in the bear market, but not yet in the uniform dark blue that previously marked the bottom."
He emphasized the need for careful interpretation of metrics, noting that the dormancy metric, which tracks how long coins remain inactive, tends to increase as the investor base matures over different market cycles.
