Bitcoin is undergoing a “structural cooling” correction rather than a capitulation, as on-chain indicators suggest gains haven’t been wiped out and the price remains significantly above the realized price support zone.
The decline began when Bitcoin dropped from six-figure prices to around $80,000–$70,000 due to profit-taking and weakening inflows. Despite widespread selling pressure, data such as NUPL, MVRV, and exchange/ETF money flow behavior suggest the market has not yet entered a cyclical Dip panic.
- Bitcoin is still about 18% higher than its realized price of $55,000, so it hasn't reached the "washout" threshold commonly seen in bear markets.
- NUPL fell to the 0.20–0.30 range and MVRV retreated to near 2.0, reflecting contracting returns but not yet reaching the surrender zone.
- Signs of cyclical Capital contraction and increasing pressure from short-term investors are emerging, while accumulation is happening; recovery depends on new Capital inflows, including ETFs and macroeconomic liquidation .
Bitcoin has not yet created "capitulation" because the price is still higher than the realized price.
Bitcoin is still about 18% above its realized price of $55,000, so the current correction is more of a cooling-off after a strong rally, not a complete surrender.
The decline began when the price retreated from its six-figure peak and pulled back to around $80,000–$70,000, amid increased profit-taking and weakening inflows. As selling pressure expanded, Bitcoin approached a key on-chain support zone but failed to break through it.
In previous bear market "washout" phases, Bitcoin typically traded 24–30% below its realized price. This threshold hasn't been reached yet, making it difficult for the market to confirm a complete surrender based solely on price declines.
NUPL is falling but hasn't reached panic levels like its previous Dip .
NUPL has retreated to the 0.20–0.30 range, indicating strong compression of unrealized profits, but it has not yet fallen to 0.0 or negative levels like historical Dip .
As price pressure increases, the NUPL indicator falls to the 0.20–0.30 range due to shrinking "paper" profits. However, the fact that the index remains above 0.0 suggests that panic loss distribution has not yet become the dominant trend.
In terms of cyclical structure, the closer NUPL approaches zero or negative, the more it reflects investors incurring unrealized losses, which can easily trigger mass sell-offs. Currently, this signal only indicates increased psychological pressure, not yet the breaking point of the cycle.
MVRV cooled down to near 2.0, but overall profitability remains strong.
The MVRV drop to near 2.0 indicates a cooling of valuations and declining profits, but it remains far from the capitulation zone, limiting forced selling and creating conditions for sideways consolidation.
At the same time, MVRV fell to near 2.0 as market valuations cooled down. This reflects shrinking profits, but since most holders are still profitable, forced selling pressure has not yet erupted.
When the "majority remains profitable" state persists, Bitcoin typically tends to stabilize to create a longer price base before recovering. This is a key difference between corrections within an uptrend and the deep consolidation phase of a bear market.
Capital absorption weakens when prices Peg high, increasing the risk of a prolonged correction.
The Capital supporting the uptrend is weakening as the peaks of upward momentum gradually diminish, signaling a slowdown in new Capital inflows despite high prices, thereby reducing the ability to absorb supply.
During 2023 and early 2024, Capital expansion supported the "structural rally" as the Realized Cap Impulse remained firmly above +2.0. During this period, the price rose from below $30,000 to $70,000 and then into the $100,000 range, indicating that the increase was backed by real Capital inflows.
ETF inflows and institutional allocations have injected large amounts of Capital , while long-term holder have absorbed the circulating supply. This balance reflects sustained demand and confidence, helping to maintain high valuations.
As the cycle progresses toward the end of 2025, the upward momentum slows: impulse peaks decline from above +4.5 to near +2.0 while the price remains around $100,000. This divergence suggests that the rate of new Capital inflow is decreasing, while profit-taking is gradually replacing new accumulation.
As expansion continues to cool down, the compression impulse returns to 0.0 and then turns negative in early 2026, signaling a structural contraction of Capital . With supply still present, prices are softening towards the $85,000–$90,000 range, reflecting weakening demand.
In this context, a renewed acceleration depends on the return of ETF inflows, accumulation by long-term holder , and liquidation . Conversely, if inflows continue to deteriorate, the corrective/defensive phase may persist.
on-chain pressure is concentrated on short-term investors, while long-term holder remain strong.
on-chain tension suggests that buyers have recently suffered losses and are prone to panic selling, while long-term holder confidence is more stable, creating a foundation for gradual accumulation.
The structural depth of the correction is evident in the narrowing of holder profits. At the time of recording, approximately 50% of the supply was still profitable, indicating a thinning "profit buffer" coupled with weakening demand.
The STH-MVRV indicator around 0.95 confirms that recent buyers are incurring losses, helping to explain panic selling. Conversely, the realized cap of long-term holder remains stable, suggesting that long-term confidence has not been broken.
Spending behavior reflects a “stress transfer” between groups. The execution losses increased sharply as short-term holder moved over 100,000 BTC to exchanges, characteristic of forced distribution. However, rising Accumulation Trend Scores imply that Dip -buying pressure is gradually absorbing the losses.
Floor cash flow typically reflects liquidation conditions: "Capitulation inflow" occurs during price declines, but intermittent withdrawals suggest tightening supply. Simultaneously, net ETF outflows and thinner spot volume reinforce a defensive accumulation pattern, awaiting the return of new Capital .
Conclusion: The correction is cooling down; recovery requires a return of Capital .
The current correction leans towards structural cooling due to weakening cash flows and shrinking returns, while recovery depends on Capital re-expansion, including ETFs, long-term accumulation, and liquidation.
- Bitcoin is showing signs of a structural cooling rather than a surrender, as inflows weaken and gains are compressed, but it is still holding above the realized support zone.
- Short-term pressure is increasing as accumulation begins to emerge; a recovery requires new Capital inflows and a favorable liquidation environment.
Frequently Asked Questions
Why is it said that Bitcoin has not yet "capitulated" despite its sharp price drop?
Because Bitcoin is still about 18% higher than its realized price of $55,000, while historical "washout" phases typically trade 24–30% below the realized price. At the same time, the NUPL is still above 0.0, so it doesn't yet reflect a panic sell-off on a cyclical Dip scale.
What does the NUPL range of 0.20–0.30 mean?
This area indicates that unrealized profits have been significantly compressed, but have not yet transitioned into widespread losses. If the NUPL falls to 0.0 or negative, the risk of panic distribution and capitulation-style Dip is generally higher.
What does MVRV being close to 2.0 say about Bitcoin's valuation?
The MVRV drop to near 2.0 reflects cooling valuations and reduced profits from its peak. However, this level still indicates that many holder are still profitable, so forced selling is generally more limited compared to the capitulation phase, when MVRV could fall deeply to extremely low levels.
Which indicator suggests that short-term investors are under pressure?
The STH-MVRV around 0.95 suggests that recent buyers are incurring losses, potentially leading to panic selling. Additionally, data indicates that short-term holder have transferred over 100,000 BTC to exchanges, implying forced distribution during the downturn.
What could trigger a more sustained recovery rhythm?
Sustainable recovery typically requires a return of new Capital , particularly ETF inflows, accumulation from long-term holder , and improved macroeconomic liquidation conditions. If inflows continue to weaken, the market may prolong its defensive consolidation phase.
