Bitcoin Capitulation Signal Fires as Markets Enter Bottoming Phase

CryptoQuant analyst Darkfost has identified a key signal in Bitcoin's unspent transaction outputs (UTXOs), suggesting that investors are capitulating and markets may be entering a bottoming phase. The ratio of UTXOs spent in profit versus at a loss has fallen to its lowest level this bear market cycle, according to Darkfost.

This metric has historically coincided with bear market bottoms, including the previous low in mid-2023 when BTC prices fell to around $26,000. Analyst DurdenBTC agrees, stating that the signal 'caught every cycle low since 2016' and that it 'will still feel terrible for weeks.'

Darkfost also notes that long-term holders are starting to enter a capitulation phase, with the Spent Output Profit Ratio (SOPR) increasingly moving into negative territory. However, he cautions that this correction has been fueled by short-term holder inflows to exchanges.