Bitcoin is trying to find its footing — and right now, it feels stuck in quicksand.
After a sharp correction, the world’s largest cryptocurrency has attempted several rebounds in recent sessions, only to see upward momentum stall. Prices remain trapped in a narrow range, frustrating short-term traders hunting for a clean breakout while longer-term investors scan the data for clues about what comes next.
Despite the hesitation, history suggests something important may be happening beneath the surface.
A Signal Straight Out of the 2022 Bear Market
One of Bitcoin’s most telling on-chain indicators has just flashed a level last seen during the depths of the 2022 bear market.
According to Glassnode data, the percentage of Bitcoin supply in profit has fallen to roughly 50%. In simple terms, half of all circulating BTC is now underwater.
That threshold matters.
In previous market cycles, profitable supply compressing to around 50% has aligned more closely with market bottoms than with the start of extended sell-offs. When so many holders are sitting on losses, the incentive to sell weakens dramatically.
Instead of panic dumping, investors tend to wait — reducing sell-side pressure and allowing price action to stabilize.
Why Selling Often Dries Up at These Levels
When Bitcoin holders are deep in the red, realizing losses becomes psychologically harder. As selling slows, price declines lose momentum.
At the same time, value-oriented buyers begin to step in. Historically, periods when profitable supply drops to or below 50% have attracted fresh capital from investors who see limited downside compared to long-term upside.
This dynamic has repeatedly laid the groundwork for recovery phases — not explosive rallies overnight, but gradual rebuilds after volatility burns itself out.
Macro Indicators Agree: No Overheating Here
Broader cycle indicators are telling a similar story.
The Pi Cycle Top Indicator, which compares the 111-day moving average against a doubled 350-day moving average, remains nowhere near signaling a market top. This metric has historically flagged major Bitcoin peaks when the shorter average crosses above the longer one.
That’s not happening.
Instead, the shorter average is diverging below the longer trend — a setup that reflects cooling conditions rather than speculative excess. In past cycles, this configuration often appeared before sustained recoveries, as the market reset from overheated levels.
This Cycle Isn’t Playing by the Old Rules
What makes the current setup especially notable is how different this cycle has been.
Since March 2023, Bitcoin has maintained a macro uptrend without the explosive overheating that defined previous bull runs. Price appreciation has been more measured, limiting speculative mania.
That makes the current signal stand out: this isn’t a panic-driven capitulation like prior bottoms, but the first clear bottoming structure in nearly three years driven by gradual cooling rather than collapse.
Key Price Levels Now in Focus
From a technical standpoint, Bitcoin is holding its ground — but just barely.
BTC remains above the 23.6% Fibonacci retracement near $63,007, a level that has repeatedly acted as a safety net. At the time of writing, Bitcoin trades around $68,905, defending support despite multiple tests.
The ceiling, however, remains firm.
Resistance: $71,672
Next upside target: $78,676
Major confirmation level: $85,680 as sustained support
A decisive break above $71,672 would signal that buyers are regaining control. Only a successful reclaim of $85,680 would confirm a broader recovery trend.
The Risk That Could Spoil the Bounce
Not all signals are aligned just yet.
The short-term holder to long-term holder (STH/LTH) supply ratio has moved above its upper band — a sign of growing short-term participation. Historically, this shift brings higher volatility and weaker price stability.
If short-term traders dominate, Bitcoin may struggle to push through resistance. Even a brief breakout above $71,672 could be met with aggressive selling, dragging prices back toward the $63,000 zone and invalidating the bullish setup.
A Market at a Crossroads
Bitcoin now sits at a familiar crossroads:
on-chain data suggests downside exhaustion, while market structure warns that volatility isn’t done yet.
For short-term traders, the range-bound action is maddening. For longer-term investors, the current conditions resemble early-stage bottoms of past cycles — quiet, uncomfortable, and easy to dismiss.
If history rhymes, this pause may not be a failure to rally — but the calm before Bitcoin decides its next major move.