On July 26, the Panic and Greed Index fell from the previous day's 27 further down to 26, continuing to remain in the emotional range marked as "panic." The decrease in value indicates that the current market overall leans toward pessimism rather than greed. Corresponding to this sentiment is the concentration of losses among long-term holders in on-chain data. Analyst and trader Killa pointed out that the loss supply of Bitcoin long-term holders has already exceeded the extreme levels during the FTX crash phase, with the extent of losses comparable to the bottom phase of the 2018 bear market. Both historical references are seen as typical moments of deep pessimism and severe losses. Against the backdrop of the Panic and Greed Index remaining low and the long-term holders' loss supply climbing to historic extremes, Killa proposed the judgment that "the market may be approaching a bottom area," believing that these bottom-related indicators are signaling relative proximity to the lower bound. However, he also warned that approximately 80% of the cycle top indicators during the last Bitcoin bull market were not triggered, showing a significant risk of failure for commonly used indicators at critical inflection points. Therefore, both the emotional index and the long-term holders' loss data are better viewed as reference signals near the bottom rather than tools for precisely pinpointing a single price low.

Panic Index Continues to Decline: Sentiment Slides Toward Deep Pessimism

The Panic and Greed Index essentially quantifies market sentiment on the "panic—greed" axis with a scale of 0 to 100, where a lower value represents a more panicked market. On July 26, this index further fell from the previous day's 27 to 26, seemingly just a 1-point change. However, it reflects the short-term sentiment weakening continuously: investors have slid from a slightly hesitant defensive posture to an area directly marked as "panic" by authorities. This means that the current dominant discourse is no longer about future upward potential but rather concerns about recent pullbacks and holding risks.

When in the panic range, typical behavior patterns often involve actively reducing risk exposure: some participants choose to "watch and wait" by cutting positions and decreasing the frequency of adding to their positions, while others opt to take profits when prices rebound weakly. The result is a contraction in buying willingness and a more concentrated selling pressure, leading to market effective liquidity leaning toward one side in the short term. Historically, extreme pessimism or sustained panic sentiment tends to appear in the latter part of a price and valuation down cycle, viewed by investors as one of the potential bottom signals. However, this emotional state may also prolong its stay near the bottom area, so a more reasonable interpretation is that the current Panic Index has reflected that the market is in a late-stage downtrend while still digesting pressure.

Long-Term Holders' Losses Soar: Worse than FTX Crash

While the sentiment indicators have pointed to "panic," the on-chain data also provides a more intuitive depiction of pressure. The so-called long-term holders' loss supply refers to the total amount of chips that have been held for a long time and have not been frequently traded recently, which are currently in a state of unrealized losses. This metric reflects not short-term speculative gains and losses but the magnitude of drawdowns endured by capital that has gone through an entire up cycle, typically viewed as "firm supporters," during the down phase.

Analyst Killa mentioned that the loss supply of Bitcoin long-term holders has now exceeded the levels seen during the FTX crash period. The FTX incident was seen as one of the typical extreme scenarios of on-chain losses and the outbreak of market panic; currently, the related data has surpassed that time, indicating that the loss pressure in this round of adjustments is even more concentrated on long-term funds. Furthermore, comparing the current loss levels to the bottom phase of the 2018 bear market, Killa believes they are in a comparable range, suggesting that the current book losses of long-term holders are approaching the intensity seen during the last typical bottom period.

From a cyclical behavior perspective, long-term holders often accumulate considerable profits during sustained up phases but bear significant unrealized losses during deep pullbacks and near bottom areas; this pattern has repeatedly occurred in multiple cycles of the crypto market. When a large number of long-term holders enter a loss state, it typically signifies that prices have significantly deviated from previous highs and are nearing the end of a major adjustment. It is precisely in this context of synchronized extreme sentiment and on-chain data that Killa assesses the market is more likely approaching a bottom area rather than just commencing a new round of declines.

Data Points to 2018 Bear Market: Bottom Characteristics Replaying

If one were to find a reference point for the current market, the bottom of the 2018 bear market is almost the starting point for all on-chain and sentiment studies. This phase is typically characterized by significant drawdowns in prices, substantial unrealized losses among long-term holders, and sentiment indicators remaining in an extremely pessimistic range. Killa's judgment is based on this "typical bottom snapshot": he observed that the current long-term holders' loss supply not only exceeds the extreme levels seen during the FTX crash but is also comparable to the bottom phase of the 2018 bear market. This means that from both the dimensions of loss depth and concentration, the current environment exhibits some core characteristics of historical bottom phases.

Sentiment data signals resonate with this on-chain picture. On July 26, the Panic and Greed Index dropped from the previous day's 27 to 26, remaining marked in the "panic" range, reflecting a significantly pessimistic market sentiment, which is one of the common indicators of historical bottoms. Coupled with the behavior pattern of long-term holders often choosing to continue holding or gradually increasing their positions rather than collectively liquidating in the latter part of a bear market, Killa views the combination of "long-term holders deeply in losses + sustained panic sentiment" as a key piece in the bottom formation process. However, he also emphasizes that this highly similar combination to 2018 mainly raises the probability of being "near the bottom area" rather than providing a precise time point for bottom fishing, especially given that approximately 80% of top indicators in the last bull market had collectively failed, any conclusion based on historical analogy must be regarded as a probabilistic assessment rather than a certainty.

80% of Top Signals Failed in Last Bull Market

While emphasizing that the current "approaching bottom area" is merely a probabilistic assessment, Killa presented a counterexample from the last Bitcoin bull market: at that time, when the market entered a noticeably top phase, about 80% of cycle top indicators were actually not triggered. The so-called cycle top indicators are typically a bundle of signals formed by integrating multiple dimensions such as price performance, on-chain data, macro environment, and capital flows, rather than simple thresholds of single price or single on-chain variable. During the last bull market, most of these composite signals were in a "below warning level" state, but prices had already entered the top area and subsequently entered a correction phase, directly indicating that these indicators were neither sufficient conditions nor necessary conditions for the appearance of the top, showing obvious risks of lag and failure.

Based on this experience, Killa further deduces: future so-called "bottom indicators" may also potentially replay the same scenario — many bottom indicators might not trigger or even appear to be "safe," while the market has already undergone or is undergoing a bottom area. Therefore, whether it is the Panic and Greed Index such as emotional scales or long-term holders' loss supply such as on-chain data, none can be regarded as a single "on-off switch" for trading. In practice, treating any single indicator as providing a certain answer for precisely identifying a top or bottom carries a risk that lies not within the indicator itself but in neglecting the dynamic relationship among price structures, on-chain behaviors, macro contexts, and capital flows across multiple dimensions.

From Panic to Possible Bottom Formation: How to Weigh Current Strategies

Juxtaposing the current Panic and Greed Index down to 26 in this "panic" range with the long-term holders' loss supply already exceeding the levels during the FTX crash and the loss extent approaching that of the bottom phase in 2018 allows us to cautiously draw an intermediate conclusion: the market possesses multiple characteristics of being "near the bottom area," but no one can claim that the bottom has been clearly defined, nor can it be viewed as a precise time coordinate for bottom fishing. Especially in light of the historical experience where about 80% of top indicators in the last bull market were not triggered, Killa's warning is very critical — even widely observed indicators like the Panic and Greed Index and long-term holders' loss supply may collectively fail at crucial moments. From a strategic perspective, the more reasonable approach is not to make "all in" judgments around any single number but to consider "potentially in the bottom area" as one of many scenarios, cross-verify through price trends, more on-chain data, macro environments, and capital flows, and based on this, first define the overall risk budget, then decide on position rhythm and exposure size. In other words, the current data serves more as a reminder for investors: on one hand, to pay attention to the potential cyclical opportunities behind the panic, and on the other, to use diversified judgments and strict risk controls to cope with the reality of potential indicator failures, rather than treating any single indicator as an unconditionally reliable operational signal.

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