How to Use On-Chain Data to Determine if Bitcoin Is in a Bottom Range
Judging Bitcoin's bottom cannot rely solely on candlestick patterns; on-chain data offers deeper logic. The core is to see whether signals across three dimensions resonate: whether long-term holders have started accumulating, whether miners are entering capitulation, and whether the market's overall unrealized profit/loss is near historical bottom levels. Current on-chain indicators suggest Bitcoin has entered the "latter half" of a bottom range, but full confirmation still awaits several key signals.
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Step 1: Check Long-Term Holder Behavior – Accumulation or Distribution
What to do: Observe the net position change of addresses holding for more than 155 days (long-term holders).
How to do it:
Use Glassnode data to check the 30-day net position change of long-term holders. When this metric turns from negative to positive, it indicates long-term investors are shifting from selling to buying.
Current data shows that long-term holders have moved from net distribution to net accumulation, with the 30-day net position change now positive, and the net accumulation size around 50,000 to 100,000 BTC.
When is it considered done: Confirm that the long-term holder net position change is positive for several consecutive weeks and the accumulation trend score is above 0.5.
Historically, a sustained shift from distribution to accumulation by long-term holders often appears during market downturns and is an important bottom signal. However, Glassnode also notes that the accumulation score for the largest whale cohort (holding over 10,000 BTC) is only about 0.4–0.5, still near neutral and not yet showing clear willingness to increase holdings, meaning a comprehensive accumulation trend has not yet become self-reinforcing.
Step 2: Check Miner Behavior – Whether Capitulation Has Begun
What to do: Observe miners' selling activities and hash rate changes to determine whether the miner capitulation phase is occurring.
How to do it:
Look at the Miner Reserve trend. In the first half of 2026, listed mining companies sold over 32,000 BTC in a single quarter, a new all-time high.
Check whether the hashprice has fallen below the breakeven line of most miners. In 2026, hashprice fell to just over $20 per PH/day, below the roughly $35 cost level for older miners.
Watch whether total network hash rate is in clear decline – this is usually a direct signal that miners are shutting down machines.
When is it considered done: Confirm that hashprice has dropped below cost and the hash rate has started to fall, indicating the miner capitulation phase is underway.
Miner capitulation is regarded as a key link in bottom formation – after high-cost miners are forced offline, difficulty adjustments make the survivors more profitable, thereby repairing the market. This round of miner capitulation differs from previous ones: listed miners' debt has ballooned from about $2.1 billion to roughly $12.7 billion, potentially making liquidation pressures more protracted than before.
Step 3: Check the Market's Overall Profit/Loss State
What to do: Use indicators such as MVRV Z-Score and NUPL to judge whether the market has been washed out sufficiently.
How to do it:
MVRV Z-Score: Currently Bitcoin's MVRV is about 1.37 and Z-Score around 0.20, suggesting market pricing is near the average cost basis. Historically, MVRV below 1.0 marks an accumulation zone, while above 3.5 signals distribution.
Net Unrealized Profit/Loss (NUPL): Current NUPL is about 0.158, and its 100-day EMA is roughly 0.215, still not touching the negative territory commonly seen at historical bear market bottoms (all four prior bottoms dipped below the zero line).
Realized Profit/Loss Ratio: Has fallen to -0.35, a 43-month low, comparable to the FTX crash in December 2022. Historically such levels often correspond to major turning points.
When is it considered done: Confirm that MVRV is near the 1.0–1.3 range, NUPL is around 0 or negative, and the realized profit/loss ratio has reached historically low territory.
Step 4: Check Short-Term Holder Behavior – Has Panic Fully Played Out
What to do: Observe the profit/loss state of addresses holding for less than 155 days (short-term holders) when they transact.
How to do it:
Look at the Short-Term Holder Spent Output Profit Ratio (STH-SOPR). When this metric approaches around 0.93, it means short-term holders are selling at significant losses, typically corresponding to the tail end of panic selling.
CryptoQuant points out that current STH-SOPR has not yet hit the deep panic zone of 0.93 commonly seen at previous local bottoms, implying one more round of more thorough short-term holder washout may still be needed.
When is it considered done: STH-SOPR falls to near the 0.93 level and then stabilizes and recovers.
Comprehensive Signal Assessment: Which Phase Are We In Now
| Indicator | Current Status | Implication for Bottom Range |
|---|---|---|
| Long-term holder net position | ✅ Shifted to net accumulation | Positive signal, but the largest whales haven't fully entered yet |
| Miner behavior | ⚠️ Capitulation in progress | Positive signal, but debt levels are higher than ever before |
| MVRV Z-Score | ✅ Around 0.20, near historical bottom zone | Market close to value area |
| NUPL 100-day EMA | ⚠️ 0.215, not yet negative | Historical bottoms are usually lower |
| Realized Profit/Loss Ratio | ✅ -0.35, 43-month low | Approaching late 2022 levels |
| STH-SOPR | ⚠️ Has not fallen to 0.93 deep panic zone | Short-term shakeout may still be incomplete |
Overall judgment: Bitcoin is currently in the second half of a bottom range, with many indicators close to historical bottom levels, but not all signals have been confirmed. Glassnode notes that the market still needs "selling pressure to cool further, institutional flows to stabilize, and price to sustainably reclaim the True Market Mean (around $76,600)" before a trend change can be confirmed.
Common Misunderstandings and Risk Reminders
Misunderstanding 1: The bottom is a single point, not a range. On-chain data cannot tell you "whether tomorrow is the absolute low"; it can only determine whether we are in a historical bottom zone. Dollar-cost averaging (DCA) is usually more prudent than going all-in at once.
Misunderstanding 2: One indicator is enough. Any single indicator can produce false signals. It is recommended to cross-validate at least three dimensions: long-term holder behavior, miner behavior, and NUPL.
Risk reminder: On-chain data is a lagging indicator, and bottom confirmation often comes only after price has already bounced for a while. Buying at the left side of the bottom may carry the risk of "pit within a pit." Some analysts forecast a possible further test of the $56,000–$52,000 or even $40,000–$45,000 range.
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Confirmation Signals: When Can We Say "Bottom Is Confirmed"
Specific criteria:
Price holds firmly above the short-term holder cost basis (around $72,000) and the True Market Mean (around $76,600)
Spot ETF flows turn consistently positive (previously the 10-day net outflow streak ended with a single-day inflow of $266 million)
Miner capitulation's hash rate decline stabilizes and difficulty starts to adjust upward
NUPL 100-day EMA touches or approaches historical bottom territory (near negative values)
When all four conditions are met simultaneously, the probability of Bitcoin bottom confirmation rises significantly. Before that, maintain position flexibility and do not bet heavily in a single direction.
