Bitcoin Shows Early Signs of a Potential Macro Bottom Amid Recent Market Shakeout

• Bitcoin’s recent sharp correction may have set the stage for a significant rebound, signaling a potential macro bottom in the crypto market.

• The market shakeout cleared weak hands, with key on-chain metrics indicating renewed investor confidence and accumulation.

• According to COINOTAG, early signs such as a record Realized Cap and rising new Bitcoin addresses suggest a healthy reset rather than a prolonged downturn.

Bitcoin’s recent dip triggered a market reset, with key indicators like Realized Cap and Fear & Greed Index pointing to a potential bullish turnaround.

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Market detox in action: Weak hands out, strong support in

The recent turmoil in the crypto market, exacerbated by political uncertainties, resulted in a swift and severe shakeout. Bitcoin experienced a nearly 10% price drop, bottoming at around $100,421, causing billions in liquidations across perpetual swap markets. This sharp correction slashed Open Interest by over $10 billion from its peak of $80 billion, reflecting a significant reduction in speculative leverage.

Despite the initial sell-off, Bitcoin demonstrated resilience by rebounding approximately 5.2% within three days, recovering nearly half of its losses. While this recovery is modest, it signals that the market may be stabilizing. Supporting this, CryptoQuant data reveals Bitcoin’s Realized Cap has reached an all-time high of $935.10 billion. This metric indicates that a substantial volume of Bitcoin has recently transacted at higher prices, suggesting sustained investor confidence and accumulation rather than panic selling.

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Source: CryptoQuant

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This elevated Realized Cap reflects a shift in market psychology, where investors perceive current prices as attractive entry points. Such behavior often precedes sustained upward momentum, reinforcing the hypothesis of a macro bottom forming. COINOTAG’s analysis of additional on-chain data further corroborates this emerging trend, highlighting a market detox where weaker participants have exited, leaving stronger hands to support the price.

FOMO: The market emotion that could launch Bitcoin higher

The Fear and Greed Index, a widely followed sentiment indicator, recently dipped to 46 amid the sell-off, indicating growing apprehension among investors. However, it has since rebounded to 55, edging closer to the “greed” zone that typically signals increased risk appetite and buying enthusiasm. Historically, such sentiment shifts mark the onset of accumulation phases where investors re-enter the market with conviction.

Complementing this sentiment recovery, the number of new Bitcoin addresses has turned positive after a brief lull, according to Glassnode data. This uptick suggests that not only seasoned traders but also new participants are responding to market conditions with renewed interest, driven by FOMO (Fear of Missing Out).

Source: Glassnode

These combined technical and psychological indicators suggest that the recent deleveraging phase was a necessary correction rather than a market collapse. On June 4th, approximately 10,000 BTC were withdrawn from spot exchanges at around $104,700 each, underscoring strong demand and accumulation by holders. This activity aligns with COINOTAG’s thesis that the market is undergoing a healthy reset, clearing out speculative excess and positioning Bitcoin for its next upward trajectory.

Conclusion

In summary, Bitcoin’s recent price correction appears to have acted as a market reset, eliminating weaker hands and fostering conditions conducive to a sustainable recovery. Key metrics such as the all-time high Realized Cap, improving Fear and Greed Index, and increased new address growth collectively point toward a potential macro bottom. While it remains prudent to monitor ongoing developments, current data supports the view that Bitcoin is poised on a springboard, ready for a possible rally. Investors should consider these signals carefully and stay informed as the market evolves.