Carmelo_Alemán
Bitcoin Enters a Capitulation Phase After the Break of Key Support Levels
Following the confirmation of Bitcoin breaking the $84,000 support on the daily timeframe, another key daily support has been lost at the $79,541 area. This sequence of breakdowns across major support levels reinforces the view that the market has shifted regime, indicating that Bitcoin has entered a bear market. This context also allows us to affirm that the market has entered a new phase of the cycle: capitulation. Capitulation refers to the realization of losses by a large share of market participants. The ongoing price decline — a defining feature of bear markets — leads to a deterioration in profitability, particularly among short-term investors known as Short-Term Holders (STH). This group typically holds a higher average entry price and, as the market continues to move lower, is gradually forced to sell at a loss, increasing spot-side selling pressure. Both components of price, Spot and Futures, are now bearish. Until recently, price was supported by spot demand, which prevented a deeper breakdown, while futures have remained predominantly bearish since late 2023. As price loses consistency, fear and uncertainty rise among investors, who increasingly sell their positions — often at a loss — triggering renewed declines. This process tends to repeat cyclically until the market reaches an equilibrium, which usually requires time. This behavior is reflected in key on-chain metrics. STH-SOPR confirms that short-term investors are realizing losses, a defining feature of capitulation. At the same time, rising Bitcoin reserves on exchanges (CEX) point to growing sell-side intent, as BTC is transferred from private wallets to trading platforms. Meanwhile, Bitcoin UTXO Age Bands show average cost levels across coin-age cohorts, highlighting how different groups enter pressure zones, while MVRV reflects the contraction of unrealized profits, indicating that part of the market chooses to sell either to secure gains or limit losses in a clearly bearish environment.