BTC capitulation period: the rebound is not reversal, and it will still take time to bottom up

According to Woofun AI, Glassnode's analysis indicates that BTC is still in a bear market capitulation phase. The current market performance is not a trend reversal, but rather a lengthy bottoming process. Despite the weakening dollar, US 10-year Treasury yields climbed to 4.7%, causing the financial environment to continue to tighten, and high real yields became the core macroeconomic resistance that suppressed prices. Macro divergence and on-chain valuation gaps have jointly established this judgment, and the market needs to be wary of misinterpreting a partial rebound as a return to a bull market.

The macro-level divergence is significant, and the risk attributes of hard assets and BTC are divided. Gold remained near $4,400, and crude oil was in the middle of more than $80, highlighting BTC's lack of participation in broader scarce asset purchases. Its trading properties are still expressed as a risk asset sensitive to liquidity rather than an inflation hedge. Although the US Dollar Index (DXY) (DXY) has retreated from its July high, the BTC price is still anchored in the $60,000-$65,000 range.

This divergence shows that high real and nominal returns drive up the opportunity cost of holding non-interest-bearing assets. To form a more favorable macro background for BTC, it is necessary not only to weaken the US dollar, but also to be accompanied by a continued decline in US bond yields to ease the tight financial environment.

On-chain valuation models confirm that the market has entered the capitulation phase (capitulation phase). The structural trend has been consistent since the price fell below the real market average ($75,800) and the short-term holder cost benchmark ($68,500) in early February 2026.

This break has established a bear market pattern, meaning that BTC's transaction price is lower than the cost of holding positions for recent buyers and a broad spectrum of active investors. As the bear market deepened, the short-term holders' cost benchmark fell to $68,500, below the real market average of $75,800, indicating that the current token replacement price is below the bottom line of these two major groups' positions.

This structure is typical of the surrender phase, and historically, the bottom of the cycle is often nurtured in this range. As long as the price continues to fall below the short-term holders' cost benchmark, new buyers attract funds with high certainty at this stage, but the overall market remains extremely vulnerable to adverse macroeconomic shortfalls.

According to data compiled by Woofun AI, the current cycle showed the characteristics of shallow retracement, broad distribution, and bottom-up logic. The market has been in the capitulation range for almost three months since mid-May. The relative peak of unrealized losses was around 0.25 (25%), far below the level of more than 0.6 (60%) during the capitulation phase of the previous cycle. This indicates that the retracement in this round was shallower, but more widely distributed. Part of the supply was absorbed during the election period at prices far below historical highs, so that the upper pressure plates were distributed relatively evenly rather than concentrated at the top of the cycle. The realized profit to loss ratio of 0.75 is still above the 0.5 range that historically marked the exhaustion of selling pressure. As a 90-day moving average, the indicator would need to reside at the 2.0 critical threshold to confirm a reversal. There was a significant decline in the second half of January and May 2026, and it has been operating for more than seven months in a confirmed bear market pattern. It takes longer to digest the scattered upper grip, which directly led to the current sideways fluctuation.

There is a clear differentiation between derivatives and the spot market. Contracts are picking up, but US needs are lacking. The 30-day perpetual contract market-direction premium has rebounded sharply back into a positive range after experiencing a recent sharp drop and turning negative. This shows that leveraged traders are once again willing to pay a premium for long risk exposure, reflecting a significant improvement in speculative risk appetite.

However, compared with the extreme positive premiums seen in previous pulsed markets, the current reading is still relatively moderate, indicating that derivatives positions have turned too high but have not yet reached a fanatical state. Meanwhile, the Coinbase (COIN.US) premium index continues to be negative and is below the zero axis, indicating that US spot demand has not yet formed effective support. This has led to a clear divergence between recovering leveraged risk appetite and sluggish spot participation. Only if the Coinbase (COIN.US) premium continues to return to a positive range can we more strongly prove that the recovery was driven by actual US spot funding.

Capital flow and volatility indicators show that ETF stabilization and options games coexist. The flow of US spot ETFs has substantially improved compared to the severe sell-off in June and early July, when the 7-layouts daily average slipped to around -5,000 BTC per day. Since then, capital inflows have returned to positive values several times, and there was a strong wave of holdings growth in early August. The latest reading was slightly corrected after a brief shift, indicating that sell-off pressure at the institutional level has abated significantly. In terms of implied volatility, the DVOL index fell back to mid-30 and is in the low range of the past two years, indicating that expectations of forward fluctuations in options market pricing are relatively flat.

The 25-delta skewness (Skew) remains positive, but the 1-week expiration bias has dropped to a low level in the recent range, while the bias for longer due dates remains around 10% — 13%, indicating short-term panic relief. Option premium trading is highly concentrated around the exercise price of $65,000. Call option purchases are mainly concentrated at $68,000 and $130,000, while significant bearish buying at $45,000 indicates that some investors are still on a deep downward defense, and the position structure is still seriously divided.

According to comprehensive research, the macro environment is still the main constraint, and falling yields and exhaustion of selling pressure are key indicators for future observation. The weak dollar was offset by 10-year US Treasury yields that climbed to around 4.7%, and BTC lagged behind in rising gold and crude oil purchases. The on-chain model shows that the price is lower than the actual market average and short-term holders' cost benchmark, confirming that it is in the capitulation phase; however, relatively unrealized losses peaked at around 0.25, indicating that the current round of retracement is shallower and more evenly distributed, and needs to be digested over time rather than deeper price declines. A profit and loss ratio of 0.75 has been achieved, confirming that the selling pressure phase has not yet arrived. Until yields fall back and the ratio returns to the 2.0 threshold, any recovery should be viewed as a partial rebound in the process of bottoming out rather than a trend reversal.