Bitcoin has fallen into a valuation zone rarely seen outside the depths of major bear markets, but analysts say that does not necessarily mean a bottom is in place.
Two closely monitored indicators suggest the market is undergoing capitulation. According to Checkonchain, bitcoin recently traded near its 200-week moving average, a long-term support level that has historically attracted buyers during periods of extreme weakness. The firm’s model currently ranks BTC within the cheapest 10% of its historical valuation range, a threshold reached only during the most severe market downturns.
Sentiment has deteriorated just as sharply. The Crypto Fear & Greed Index has dropped to 9, deep within extreme-fear territory, compared with 11 a week ago and 48 one month earlier. The index tracks investor sentiment through a combination of market volatility, trading volumes and social media activity.
Such readings often emerge when panic selling is nearing exhaustion. However, Checkonchain argues that capitulation alone rarely marks the end of a bear market. Historically, major bottoms have been followed by extended periods of sideways trading, a phase that gradually tests the patience and conviction of investors who remain in the market.
Bitcoin briefly traded below $60,000 this week for the first time since 2024 before recovering some losses. The asset was changing hands at $62,623 on Thursday, up 1.9% on the day. Even so, prices remained lower for the week as continued ETF outflows weighed on demand.
The broader crypto market mirrored bitcoin’s modest rebound. Ether gained 1.4% to $1,651, BNB rose 1.3% to $595, Solana advanced 0.9% to $65 and Dogecoin added 1.1% to $0.085. XRP was the exception, slipping 0.3% to $1.12. Despite the daily gains, all major cryptocurrencies remain down over the past seven days, with Ether and XRP leading weekly declines.
The macro backdrop remains challenging. U.S. inflation accelerated in May, with consumer prices rising 0.5% month-over-month and 4.2% from a year earlier, the fastest annual increase since early 2023. Higher energy costs, driven by escalating tensions involving Iran, were a key factor behind the increase.
One bright spot came from core inflation, which excludes food and energy prices. The measure rose 0.2%, below economists’ expectations, suggesting underlying price pressures may not be accelerating as quickly as headline figures indicate.
Meanwhile, optimism surrounding U.S. crypto regulation has weakened. “Hopes for U.S. regulatory clarity have faded again, with Polymarket odds of the Clarity Act passing in 2026 dropping from 62% to 48% this week,” Yves Renno, Head of Trading at Wirex, told CoinDesk.
Investor attention is now firmly focused on the Federal Reserve’s June 16-17 meeting. Markets are looking for signals on future monetary policy, with Renno noting that the Fed’s tone could determine whether bitcoin stages a recovery toward the $68,000-$72,000 range or risks another break below $60,000.
Broader financial markets are facing similar pressures. Global equities slipped to their lowest levels in more than a month as a technology-led selloff intensified and geopolitical tensions rattled investor confidence.
MSCI’s All Country World Index fell to its weakest level since May 5, while its Asia-Pacific benchmark declined 0.8% to a three-week low. Brent crude climbed 1.8% to around $95 a barrel as traders assessed energy supply risks. At the same time, expectations of tighter monetary policy continued to build, with the European Central Bank widely expected to raise interest rates for the first time since September 2023.
