Bitcoin prices have hit a pause – and despite the recent bounce, the data shows the recovery is not yet confirmed.
Over the last two weeks, Bitcoin has been locked in a sideways range, swinging between roughly 60,000 and 72,000 dollars. At the time of analysis, BTC was changing hands near 67,800 dollars, showing a mild short-term upward push. On the surface, this might look like the start of a comeback. Underneath, however, key on‑chain and derivatives indicators are signaling that the market is still in a fragile, bearish regime.
Fear dominates despite a price rebound
While the price has stabilized above the lows, broader sentiment remains deeply fearful. Many market participants are still scarred by recent volatility, and liquidity is thin compared to the euphoria seen near the previous highs.
Institutional players, according to positioning and flows, largely appear to maintain a simple strategy: endure the drawdowns and “buy more” on weakness. Yet even this steady accumulation does not erase the short‑term risks. With fear still high and leverage building, the stage is set for more violent moves in both directions.
Long squeeze risk: why aggressive longs are vulnerable
During the current consolidation, the long/short ratio in derivatives markets has risen, and the share of leveraged long positions has climbed. That combination often sets up conditions for a long squeeze:
– Many traders go long, expecting a breakout.
– If price fails to move higher and instead dips, forced liquidations of those leveraged longs can cascade.
– This chain reaction accelerates selling pressure and can temporarily drive price sharply lower.
Analysts have cautioned that traders trying to front‑run a recovery with aggressive long positions may be walking into this kind of trap. A long squeeze, while painful, is often part of the process of “cleaning out” excess leverage before a durable bottom can form.
The missing “full cleansing” of the network
Every Bitcoin cycle typically includes a phase of extreme stress, where weaker hands capitulate, leverage is flushed, and on‑chain data shows heavy realized losses. That phase has not fully materialized in the current cycle.
One key trackable element is the so‑called Sales Pressure signal, which reflects severe network stress and capitulation. This signal has been missing for almost three years. During this entire stretch, the spot price has stayed above the network’s on‑chain realized price, currently estimated around 54,800 dollars.
The duration of this “no‑stress” period is now at a record level of about 1,133 days, according to on‑chain analytics. Historically, such long spans without a deep stress event are unusual and often precede a sharp, cleansing correction. That is why many analysts argue that the market has not yet gone through the full reset that tends to anchor a long‑term bottom.
Why 54,800 dollars is a critical battlefield
To understand the risk, it is important to look at three key cost‑basis levels derived from the blockchain:
– Short‑term holder realized price: around 91,400 dollars
– Overall network realized price: around 54,800 dollars
– Long‑term holder realized price: around 38,700 dollars
These levels approximate the average price at which different groups of holders acquired their coins. The 54,800‑dollar zone, representing the aggregate network cost basis, is especially important.
If Bitcoin trades consistently below this level, the “average coin” on the network goes into an unrealized loss. That tends to increase selling pressure, panic, and forced exits. When this happens on a large enough scale, the Sales Pressure indicator typically lights up, signaling a phase of maximum network stress.
For now, BTC remains above that 54,800‑dollar line. Long‑term holders, whose cost basis is much lower near 38,700 dollars, are sitting on sizeable profits and are under little pressure to sell. This is why, structurally, the market can still be labeled bearish but not yet in a true capitulation phase.
In previous cycles, zones near the realized price have acted as strong structural supports. The current 54,800‑dollar region, therefore, is not just a technical support area; it is also a psychological and on‑chain pivot where the risk of a deep flush higher‑stakes and a potential generational buying opportunity can emerge if panic takes over.
Bearish regime, but not full capitulation
Pulling these pieces together, the current regime can be described as:
– Bearish from a cyclical and on‑chain risk perspective
– Pressured, but not yet in the kind of maximum stress phase that usually defines long‑term bottoms
– Structurally supported by long‑term holders who are still well in profit
In simple terms, there is discomfort and fear, but no widespread, forced selling among the most patient investors. Historically, a final “washout” often appears before a sustainable new uptrend begins. That washout has not been confirmed yet.
Monthly cumulative demand: an early bright spot
Not all signals are negative. One promising development is the behavior of monthly cumulative Bitcoin demand. After almost three months of depressed demand, this measure has turned positive again.
This shift suggests that, even though the overarching market tone is still bearish, underlying structural accumulation is returning. New supply entering the market appears to be increasingly absorbed rather than dumped, which is exactly what you want to see if a longer‑term base is forming.
However, a single uptick is not enough. For analysts, a genuine recovery signal would require several consecutive weeks of sustained, positive monthly cumulative demand. Only then could one argue that buyers are consistently dominating new issuance and selling, rather than just reacting to short‑term price swings.
What “recovery” would actually look like
For Bitcoin’s recovery to be considered more than a hopeful bounce, several conditions would likely need to align:
1. Sustained hold above realized price
BTC must continue to defend the 54,800‑dollar region on a closing basis. Extended trading below it would risk triggering large‑scale capitulation.
2. Reduction in excessive leverage
The long/short ratio and open interest need to normalize, reducing the risk of sudden long squeezes. Organic spot demand should take precedence over speculative futures positioning.
3. Consistent positive demand metrics
Monthly cumulative demand staying positive for multiple weeks or months would indicate that real accumulation, not short‑term speculation, is driving flows.
4. Stabilization in sentiment
Extreme fear does not need to vanish completely-lasting bottoms are often built in pessimistic environments-but the market should show signs of resilience to negative news and volatility.
5. Healthy behavior from long‑term holders
Long‑term holders continuing to sit tight or add to their positions, rather than distributing heavily into every rally, would reinforce the case for a developing base.
Until several of these conditions overlap, any upward moves risk being part of a broader, choppy bearish phase rather than the beginning of a sustained new bull leg.
How traders can think about this environment
For active traders, the current setup demands caution:
– Chasing breakouts in a range is risky when the market is crowded with leveraged longs. Fake breakouts followed by sharp reversals can quickly trigger liquidations.
– Tight risk management is essential. Using clear invalidation levels and position sizing that assumes higher‑than‑normal volatility can help limit damage from sudden squeezes.
– Timeframe alignment matters: what looks like a breakout on an intraday chart might still be a minor move within a larger, undecided range on daily or weekly timeframes.
Those inclined to accumulate for the long term may find the current zone attractive only if they accept that a deeper flush below realized price is still possible. Building positions gradually, rather than all at once, can help manage the risk of further drawdowns.
Why long‑term holders remain the key
Long‑term holders, as indicated by their realized price around 38,700 dollars, are still sitting on comfortable gains. Historically, these participants often behave as the backbone of each cycle:
– When their profits are large but they do not sell aggressively, it shows conviction.
– When they finally do distribute heavily into rising prices, it often marks late‑cycle euphoria.
– When they stop selling, or even start accumulating during drawdowns, it frequently happens near cycle lows.
At the moment, the market has not reached the kind of pain that usually forces these holders to capitulate. Their current, profitable positioning supports the idea that the network is under pressure but not yet in a “broken” state. This is another reason why analysts talk about missing “maximum stress” and a still‑incomplete cleansing process.
The big picture: between fear and opportunity
Bitcoin is now in an in‑between zone:
– The explosive optimism of previous highs has vanished.
– A definitive, washed‑out bottom has not yet been carved.
– On‑chain data shows rising risk near 54,800 dollars, but also signs of early accumulation and structural support.
For investors and traders, this means the environment is neither clearly bullish nor decisively catastrophic. Price can still swing violently within the 60,000-72,000‑dollar band, and a deeper test of the realized price region remains a real possibility.
Until monthly demand stays firmly positive, leverage is cleaned up, and the market either survives or decisively retests the 54,800‑dollar level, Bitcoin’s recovery cannot be confirmed as anything more than a tentative, fragile attempt to stabilize after a turbulent phase.
Anyone engaging with this market should treat trading, buying, or selling cryptocurrencies as high‑risk activity and make decisions only after independent analysis and careful assessment of their own risk tolerance.