CryptoQuant pegs Bitcoin’s ‘ultimate’ bear-market floor near $55K, says capitulation is still ahead

Bitcoin’s selloff has traders asking whether the pain is done. CryptoQuant’s latest read suggests not quite: the firm estimates an “ultimate” bear-market floor near $55,000 and argues capitulation hasn’t fully played out. Their on-chain dashboard remains in a Bear Phase rather than tipping into an Extreme Bear Phase—code for stress without surrender.

The important idea here isn’t the headline number; it’s the framework. “Capitulation” is rarely a single candle. It tends to be a process where marginal sellers exhaust themselves and forced supply gets absorbed by stronger hands. On-chain analytics attempt to map that process into phases. A Bear Phase often reflects persistent realized losses, softer demand, and elevated risk aversion, while an Extreme Bear Phase usually coincides with disorderly selling, outsized loss realization, and a sharper reset in participant behavior. CryptoQuant’s view is that we haven’t crossed that final threshold.

How to use a $55K “ultimate bottom” - Treat it as a zone, not a tick. Markets often probe, front-run, or overshoot neat levels. Round numbers attract liquidity but rarely mark exact turning points. - Differentiate “tradeable lows” from “cycle floors.” Bear market bounces can be violent without ending the process. If on-chain remains Bear rather than Extreme Bear, fading strength can still work until the structure shifts. - Anchor to behavior, not price alone. Capitulation, if it arrives, usually shows up as broad participation in loss-taking and acceptance of lower prices, not just a transient wick.

Why capitulation signals matter - Technological: On-chain data observes realized profit and loss across cohorts and timing of coin movement. When those flows cluster into loss-heavy transfers and older coins re-enter circulation, it often reflects genuine stress rather than narrative churn. - Market microstructure: Bear-to-extreme transitions frequently coincide with forced sellers—overlevered traders, liquidity-constrained entities, and reactive treasuries—meeting passive bids. If that supply transfer hasn’t fully happened, rallies may lack durability. - Psychology: Many participants wait for textbook “panic” that may never arrive. Sometimes bottoms form on apathy and time, not terror. Other times, the market insists on one last flush. The discipline is to prepare for both without anchoring to a single script. - Governance and ethics: Publishing a precise “ultimate bottom” can steer sentiment. It’s useful as a probabilistic reference, but overconfidence in a specific level can induce either complacency or undue fear. The responsible approach is scenario-based, not deterministic.

What I’d watch to validate or fade the thesis - Escalation from Bear to Extreme Bear on widely followed on-chain composites—clear evidence of accelerated loss realization and broader distribution by previously inactive cohorts. - Behavioral telltales: deeper risk-off in derivatives positioning, time capitulation (price grinding lower while activity and attention fade), and a rise in voluntary, not just forced, supply hitting bids. - Market structure: whether liquidity improves into weakness. End-of-bear flows often see improving absorption even as price makes marginal new lows.

Positioning around a probabilistic floor For allocators, $55K can be a planning waypoint. Some investors prefer staged entries that increase as stress rises and on-chain transitions toward Extreme Bear. Others will build around time—allocating across weeks regardless of signal precision—accepting that capitulation may be a range-bound process. Traders, by contrast, might respect rallies as mean reversion until the on-chain regime decisively shifts.

CryptoQuant’s call provides a useful map: capitulation likely unfinished, with an “ultimate” floor clustered near $55K. That’s not destiny, but it is a coherent base case. If the market never registers Extreme Bear readings and instead stabilizes through time, the absence of panic will be the signal. If we do lurch into Extreme Bear, the combination of loss absorption and cleaner positioning could set the stage for a sturdier next leg. Until then, keep a flexible playbook and let behavior—not just price—confirm the turn.