The cryptocurrency market recently experienced a heavy correction, with the total market capitalization dropping by about 30%. However, several structural and on-chain indicators suggest that this correction represents late-stage weakness and that the foundation for a renewed bull market may be forming sooner than expected.
Five Reasons the Bull Market Could Restart
The analysis points to five key areas that indicate peak weakness, peak capitulation, or a rise in fresh buying power:
- •
Short-Term Selling Pressure Looks Close to Exhaustion
Rationale: Short-term holders (STH) are panic-selling at one of the fastest rates in months, marking the typical "clean-out" phase near a market bottom. The Spent Output Profit Ratio (SOPR) for STH fell to 0.96 (matching the April low). When this metric drops below 1 and stabilizes, it historically signals that weak hands have capitulated. After the April reset, Bitcoin rallied nearly 62%.
- •
Stablecoin Power Is Building Again
Rationale: Buying power is accumulating rapidly. The Stablecoin Supply Ratio (SSR) has dropped to 11.59, its lowest reading in over a year. A low SSR means the total stablecoin supply (often referred to as "dry powder") holds significant buying power relative to Bitcoin’s market cap, which historically appears near market lows. Furthermore, the RSI of the SSR is near 26, a level that has also repeatedly aligned with Bitcoin bottoms.
- •
Altcoin Profit Reset Might Be Quietly Strengthening the Case
Rationale: Altcoins have undergone an even deeper correction, with only about 5% of altcoin supply still in profit. This deep capitulation level implies very little remaining overhead selling pressure. This massive profit reset, which is stabilizing, suggests that altcoins might be closer to forming a structural base than Bitcoin, potentially leading the next rebound.
- •
Sentiment Drops to Extreme Fear
Rationale: The Bitcoin Fear & Greed Index fell to 10, its lowest reading since February. Extreme fear typically appears only after most of the emotional selling is finished and the market has been "washed out." This fear reset strengthens the case that the base for the next phase of the bull market is forming, as similar readings preceded a large rally earlier in the year.
- •
A Fresh Death Cross Just Finished Playing Out
Rationale: A Death Cross (50-day moving average crossing below the 200-day moving average) formed on November 15. In prior bull cycles, this technical pattern has often marked a local low and trend exhaustion, rather than the start of a long crash. The price drop during this "crossing-in" phase was almost identical to the April Death Cross setup, which preceded a major rally. This suggests the event may be a final reset before the uptrend continues.
Key Bitcoin Price Context
The article highlights the significance of recent price action by referencing the last major bottom:
- •The previous low for the STH SOPR (0.96) in April corresponded with Bitcoin trading near $76,276, which preceded a 62% rally.
- •The analysis suggests that if Bitcoin holds above the recent lows, the Death Cross will prove to be another reset, forming a strong foundation for the next uptrend.
Final Conclusion
The convergence of multiple on-chain and technical signals including short-term holder capitulation, rising stablecoin buying power, extreme fear readings, altcoin profit resets, and the exhaustion signal from the Death Cross suggests that the market has experienced its peak weakness. The foundation for a restart of the crypto bull market is quietly forming, though Bitcoin must hold above its recent lows and react soon to the technical reset for the bullish scenario to fully confirm.
Important Disclaimer
This analysis is for informational and educational purposes only and is based on technical analysis and market data. It is not financial advice, nor should it be construed as a recommendation to buy, sell, or hold any security or cryptocurrency. The cryptocurrency market is highly speculative, volatile, and subject to external factors. Readers must conduct their own comprehensive research (DYOR) and consult with a qualified financial advisor before making any investment decisions.