The drop in BTC on Monday has brought its losses to 26.7%, slightly exceeding the 26.5% decline in April, marking the most severe pullback in the current bull market. This trend has triggered multiple market structure indicator alerts, suggesting that the current pullback may be the final phase of a leverage washout.
Key Points:
The 26.7% pullback in BTC has now become the largest in this cycle.
The Crypto Fear and Greed Index shows that investors are in a state of "extreme fear," but as a contrarian indicator, this may mean BTC is trading at a discount.
BTC researcher Axel Adler Jr. noted that after the severe sell-off on Monday, the local market pressure index remains high at 67.82, exceeding the system's alert threshold of 64, but still below levels associated with key crashes.
The highest tension point occurred during BTC's crash on Monday, when the realized volatility surged to a Z-score of 4.55, triggering sell signals that activated pressure alerts.
In the past 24 hours, the index has eased to a range of 62-68, although its short-term slope (+2.62) indicates that internal market pressure is accumulating again.
Sentiment indicators also show a similar picture. The Crypto Fear and Greed Index fell below 10, then slightly rebounded to 15, but remains locked in the extreme fear zone. Historically, falling into this area has often been more constructive in the past few years.
Looking back at past cycles, whenever the Crypto Fear and Greed Index drops to 10 or below, BTC tends to deliver strong forward returns. On average, the price rises by 10% within a week, maintains similar strength over 15-30 days, and accelerates to 23% by day 80, reaching 33% within six months.
Economist Alex Kruger stated that in all 11 sell-off events since 2018, when the index reached this extreme level, the short-term performance was generally weak, but almost every event resulted in a rebound. This pattern is one of BTC's most reliable behavioral characteristics: when fear peaks, forward returns significantly skew upward.
At the same time, BTC analyst VICTOR believes that the current drop is a "close your eyes and buy type of range," historically associated with later sell-offs rather than cycle tops.
The latest on-chain data shows that BTC is entering one of the most severe short-term sell-off phases in this cycle. The Short-Term Holder Profit Ratio (SOPR) has dropped to 0.97, confirming that short-term holders are continuously selling assets at a loss. Analysis indicates that this ratio has remained below the 1.0 benchmark for several weeks, forming a clear sell-off band phenomenon, which historically tends to appear near cyclical market turning points.
Similarly, the STH-MVRV indicator has significantly fallen below the 1.0 level, indicating that almost all recently purchased investors are in a loss position. Market experts believe this phenomenon is highly similar to past scenarios of unrealized loss surges, accelerated panic selling, and the depletion of supply by weak holders.
The transfer of 65,200 BTC to exchanges at a loss further confirms that the current market panic has shifted from theory to actual action. Although these signals do not guarantee an immediate market reversal, industry insiders point out that the combination of SOPR below 1.0, deep negative MVRV, and loss-driven exchange inflows collectively suggest that this market pullback may be nearing its end.
Related: New Hampshire Approves Innovative $100 Million Bitcoin (BTC) Backed Municipal Bonds
This article does not constitute any investment advice or recommendation. Any investment and trading activities carry risks, and readers should conduct their own research before making decisions.
Original: “Analyst: Bitcoin (BTC) at $90,000 is a ‘Close Your Eyes and Bid’ Opportunity”
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