According to Rafael Schultze-Kraft, co-founder of Glassnode, the comprehensive index of 45 on-chain metrics for Bitcoin indicates that the cryptocurrency has entered a capitulation phase that has lasted longer than any period since the collapse of the FTX exchange.
The #Bitcoin Cycle Position Heatmap
Red signifies euphoric phases, while blue indicates capitulation.
Currently, it is experiencing its coldest stretch since the FTX incident: late in the bear market, but not yet reaching the deep blue that previously indicated a market bottom.
Always look for confluence when trying to identify a bottom. pic.twitter.com/dEPzhB2HHB
— Rafael (@n3ocortex) August 3, 2026
To assess market conditions within the cycle, Schultze-Kraft developed the Bitcoin Cycle Position Heatmap. This tool compiles various indicators into a comprehensive heatmap: blue indicates capitulation, while red signals overheating near peaks. A significant portion of these metrics reflects the profitability of holders, classified as either short-term or long-term.
In 2026, the heatmap remains predominantly blue. A similar situation was observed in 2022, where metrics turned negative following the euphoria of November 2021, remaining in that zone until the FTX collapse in November 2022, which coincided with Bitcoin's low at $15,600.
“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,” Schultze-Kraft stated.
He also noted that individual metrics can change their behavior over time, necessitating careful interpretation when evaluating cycles. For instance, he referenced the dormancy metric, which reflects the average period coins remain inactive in transactions: as the investor base ages, these values tend to increase with each cycle.
Network Activity Increases
Glassnode also reported a significant rise in the number of active addresses and adjusted transfer volumes within the Bitcoin network. Meanwhile, capital outflows have stabilized, and weekly inflows into spot Bitcoin ETFs have resumed.
Source: SoSoValue.The ratio of Bitcoin held by short-term to long-term holders remains near historical lows, indicating that long-term investors are maintaining their positions, as noted in the analysts' review. Additionally, the proportion of coins currently in profit has approached cycle lows.
As of this writing, Bitcoin is trading around $64,600 following a failed attempt to break above $66,000.
Hourly chart of BTC/USDT on Binance. Source: TradingView.It’s worth mentioning that on August 2, the price of Bitcoin fell below $63,000 amid capital outflows from cryptocurrency funds and concerns over wallet security after the Coldcard hack.