Bitcoin on-chain metrics hit capitulation despite 40% pullback

Bitcoin’s on-chain metrics reached readings typically seen at cycle bottoms while the price has retraced roughly 40% from its all-time high, below the 75%–85% declines of earlier bear cycles. Six widely followed indicators converged on similar signals in recent weeks.

The Mayer Multiple Z‑Score fell to about -1.5 standard deviations versus the 200‑day moving average. That Z‑score appeared in March 2020 when Bitcoin traded near $3,000 and again in late 2022 during the FTX-related selloff around $19,000. The current tag occurred at roughly $62,000 and price subsequently moved back toward the $80,000 area.

The Bitcoin Sharpe Ratio declined into a band described as “Low Risk,” a range that coincided with cycle lows in 2015, 2019 and 2022. The metric measures returns relative to volatility and is used here to gauge changes in risk-adjusted returns.

On‑chain loss metrics also moved to levels associated with past bottoms. Data compiled from In The Cryptoverse shows about 39% of circulating supply is held at a loss. The 200‑week moving average, a long-term support level in prior cycles, was touched and held without a sustained breach.

Sentiment indicators did not reach historical peak readings during the 2024–2026 expansion. The Bitcoin Bull Run Index did not enter its red zone above 80. Glassnode’s Net Unrealized Profit and Loss (NUPL) peaked in the green “belief” band rather than the blue “euphoria” band and has since retreated into the orange band associated with mid‑bear or pre‑bottom positioning.

Long‑term holder behavior diverged from earlier cycles. Glassnode defines long‑term holders as wallets that have not moved coins for at least 155 days. Long‑term holder supply dipped slightly in 2024 and then returned to record levels above 14.5 million BTC.

In prior cycles, long‑term holders reduced holdings into market tops while new buyers absorbed available supply. In the current cycle that distribution pattern did not appear in the long‑term holder cohort.

Market participants and analysts note the sample of similar occurrences is small and that if longer structural patterns have changed, traditional cycle signals may have different implications. The recent alignment of multiple on‑chain indicators occurred without a corresponding euphoric price top and with long‑term holder supply near record levels.