July 24, 2026 — According to Gate market data, Bitcoin (BTC) is priced at $65,581.7, with moderate volatility over the past 24 hours and market sentiment remaining neutral. However, beneath this price lies a set of cyclical data worth a closer look: Over the past year, Bitcoin has dropped 44.85%; in the past three months, it’s down 15.27%. From the all-time high of $126,193 reached in October 2025, the maximum drawdown has approached 48%.
The depth and duration of this correction are pushing the market toward a pivotal cyclical juncture. This article aims to objectively assess whether Bitcoin is currently in a bottom formation phase, using on-chain data, historical cycle comparisons, and core valuation metrics. All analysis is based on verifiable on-chain data and historical statistical patterns and does not constitute investment advice.
Market Correction After the 2025 Peak: From Highs to Current Levels
In October 2025, Bitcoin hit its all-time high of $126,193. At that time, the market was steeped in late-bull optimism, with ETF inflows surging and institutional positions expanding. The subsequent correction was not abrupt—Bitcoin fell about 22% in Q1 2026, then another 12% in Q2, marking two consecutive quarters of declines, an uncommon pattern. June was particularly brutal, with a 19% drop—the worst monthly performance since June 2022. The price slid from $87,500 to $58,000, resulting in a cumulative 30% decline for the first half of the year.
From an on-chain perspective, this correction has essentially been a squeeze on unrealized profits. Near the 2025 peak, the market had accumulated massive unrealized gains—estimated at over $1.4 trillion, based on the gap between prices above $120,000 and the aggregate market cost basis. As prices retreated, these profits were gradually absorbed, with investors moving from "paper gains" to "break-even" and eventually "paper losses," shifting sentiment from greed to fear.
Blockworks researcher Luke Leasure noted in a July 24 report that Bitcoin has dropped 50% from its all-time high, the bear market has lasted over 40 weeks, and several high-timeframe indicators have hit historically rare levels. This month, Bitcoin recorded the most severe relative oversold reading against the Nasdaq Index ever, and in February set a similar record versus gold. These signals suggest the current correction is unusually intense in a historical context.
Comparing Historical Cycles: 2018, 2022, and 2026
Comparing this cycle to the previous two major bear markets helps clarify where the market stands.
The 2018 bear market saw Bitcoin fall from $20,000 (December 2017) to $3,100 (December 2018), a maximum drawdown of about 84%. Key drivers included the bursting of the ICO bubble, tightening regulation, and immature market infrastructure. That bear market took about 12 months to bottom out, with several "dead cat bounces" along the way.
The 2022 bear market dropped from $69,000 (November 2021) to $15,500 (November 2022), a maximum drawdown of around 77%. Factors included aggressive Fed rate hikes, the Terra/Luna collapse, Three Arrows Capital bankruptcy, and the FTX blowup. The bottoming process lasted roughly 12 months, with on-chain indicators (such as MVRV dipping below 1 and a surge in realized losses among long-term holders) providing clear signals in the bottom zone.
The current cycle has retraced from $126,193 (October 2025) to a yearly low of $57,813 (June 2026), a maximum drawdown of about 54%. The magnitude is notably less than the prior two bear markets, but the duration has already surpassed 40 weeks. Grayscale Research’s July 24 report outlined two analytical frameworks:
The "four-year cycle" framework posits that halving events remain the core driver of the Bitcoin price cycle. Historically, Bitcoin tends to bottom about a year after the cycle peak and roughly 2.5 years post-halving, with an average drawdown of 80%. Following this pattern, Bitcoin may still have room to fall further, with a bottom possibly forming in September or October.
The macro-driven framework treats Bitcoin as a mature asset influenced by macroeconomic factors. In this view, Bitcoin’s valuation logic aligns more closely with gold or tech stocks, with Fed monetary policy, real interest rates, and dollar strength as key pricing variables. If the Fed pivots, the current price could already be near the bottom.
While the two frameworks reach different conclusions, both point to one judgment: The market is currently in the process of forming a cyclical bottom, not a mid-bull correction.
Key On-Chain Indicators for Bottom Identification
MVRV Ratio: Has Valuation Entered the Bottom Zone?
MVRV (Market Value to Realized Value) measures the ratio of market cap to realized cap, indicating whether the market is generally at a premium or discount. As of July 23, Bitcoin’s MVRV ratio stands at about 1.25. A value above 1 means investors are still, on average, in profit, but this is notably lower than previous months, indicating the market is not in an excessively overvalued zone.
Worth noting, the MVRV pricing bands show direct resistance near $70,920—this is the -0.5 band, the threshold where average market cost starts generating significant selling pressure. Analyst Ali Martinez previously noted that Bitcoin has been oscillating between the -0.5 and -1.0 MVRV bands, and his buy signal only triggers at the -1.0 band (around $49,867). Bitcoin hasn’t reached that level, but found support near $60,000 and rebounded to around $66,000.
CryptoQuant analyst Axel Adler Jr. reports that the MVRV ratio for long-term holders has compressed to 1.24, the lowest in nearly three years. The cost basis for long-term holders has risen to $48,400, and when the BTC price is at $59,000, their average profit is just 24%.
Historically, MVRV tends to compress to near or below 1 at bear market bottoms. The current reading of 1.25 indicates valuation is well below bull market highs but hasn’t hit the deep discount levels seen during extreme panic.
Realized Price: On-Chain Cost Basis as Bottom Reference
Realized Price is the average on-chain acquisition cost of all circulating Bitcoin. Blockworks researcher Luke Leasure’s July 24 report notes that the current Realized Price is about $53,000, only 18% below spot price. Historically, every bear market low has traded at a discount to this level.
Bitfinex analysis also highlights Realized Price (about $54,000) as structural bottom support. If Bitcoin falls below $60,000, it could accelerate toward Realized Price ($53,000), a level historically associated with bear market bottoms.
The gap between spot price ($65,581) and Realized Price (about $53,000) is roughly 19%. This spread still has room to compress, but is much narrower than the massive divergence seen at bull market peaks.
Long-Term vs. Short-Term Holder Behavior: Profound Changes in Supply Structure
As of mid-July, long-term holders (typically wallets holding Bitcoin for more than 155 days) control 84% of total supply, while short-term traders’ share has dropped to its lowest since 2016. The supply held by long-term holders is 5.2 times that of short-term holders.
This supply structure implies two things: First, tradable Bitcoin liquidity is at a historic low, so any new demand could trigger significant price elasticity; Second, changes in long-term holder behavior now have unprecedented market impact.
However, long-term holders are not immutable "diamond hands." Glassnode data shows realized losses among long-term holders once reached $280 million per day, the highest since December 2022. Realized losses by long-term holders accounted for 43% of total on-chain realized value, up from just 15% in early February. Investors who bought near last year’s highs are reducing risk by selling at a loss—a behavior often interpreted as "capitulation selling."
Meanwhile, short-term holders are also accelerating profit-taking, with daily sell-offs exceeding $4 million. Both groups reducing positions simultaneously creates potential selling pressure overhead.
The RHODL ratio (comparing wealth held by long-term holders to new market entrants) rose to 6.5 in early July, the second-highest reading ever, before falling below 6. This decline signals long-term holders are transferring supply to new buyers—a classic sign of bottom formation.
Exchange Flows and ETF Fund Movements
Exchange inflows and outflows directly measure potential selling pressure. CryptoQuant data shows miner supply ratio has dropped to 0.00, with Binance Pool miners holding Bitcoin rather than sending it to exchanges. Miner net flow is -8.37 BTC, indicating more Bitcoin is leaving miner wallets for long-term storage. Historically, negative miner net flow aligns with reduced selling pressure.
On the ETF front, from July 14 to 23, US spot Bitcoin ETFs saw net inflows for seven consecutive trading days, totaling nearly $1 billion—the longest streak in months. However, July 24 saw a net outflow of $225 million, ending the streak. BlackRock’s IBIT ETF alone recorded a $202 million single-day outflow.
Despite the July 24 outflow, cumulative net inflows for the week through Thursday still reached about $274 million. By comparison, ETFs saw cumulative net outflows of $6.9 billion from May to June. The trend suggests the worst phase of selling may be over, but institutional demand remains fragile and unstable.
Could BTC Test $44,000?
The $44,000 price level appears frequently in current discussions, mainly based on cyclical patterns and extrapolation from historical drawdowns.
Galaxy Research’s June analysis suggests the current cycle bottom is still forming, with expectations for a range of $40,000 to $46,000 by the end of 2026. This view is based on the "four-year cycle" framework’s historical drawdown—an average 80% drop from the $126,000 peak would imply a bottom near $25,000, but Galaxy’s forecast is more conservative, reflecting the diminishing impact of halving cycles.
On-chain data shows $44,000 is about 17% below current Realized Price ($53,000). If the price drops to this level, it would mark a historically rare deep discount—not impossible, but requiring additional negative catalysts.
Factors supporting a test of $44,000 include:
- Historical cycles show bottoms typically form about 2.5 years post-halving, corresponding to September–October 2026
- Capitulation selling by long-term holders is not fully complete
- Sustained ETF inflows remain unproven
- Macro uncertainties (Fed policy, geopolitics) could further suppress risk assets
Factors against a test of $44,000 include:
- MVRV at 1.25 signals valuation is already well below bull market highs
- Realized Price ($53,000) provides robust on-chain cost support
- Long-term holders control 84% of supply, liquidity is at historic lows
- Miners are accumulating rather than selling
Risk Factors
Macro policy risk. The Fed’s dot plot projects a federal funds rate of about 3.8% by the end of 2026, above the March forecast of 3.4%. The 10-year real yield has climbed to a 2026 high near 2.4%. If the Fed maintains a hawkish stance, risk assets will remain under pressure.
Geopolitical risk. Tensions between Iran and the US escalated again in late July, pushing oil prices to a one-month high. Geopolitical conflict could raise inflation expectations and disrupt the market’s outlook for Fed rate cuts.
ETF fund reversal risk. The $225 million net outflow on July 24 reminds the market that institutional inflows are not stable. If ETFs revert to sustained outflows, it could trigger another leg down in prices.
Continued long-term holder selling risk. Although long-term holders control 84% of supply, their selling has outsized market impact. If capitulation selling persists, the time to bottom formation will be further extended.
Supportive Factors
Supply squeeze. Long-term holders control 84% of supply, while short-term holders’ share has dropped to its lowest since 2016. The tradable Bitcoin supply is at a historic low, so any new demand could spark significant price movement.
Miner accumulation. Miner supply ratio is at 0.00, with net flows negative. Miners are moving Bitcoin to long-term storage wallets, not selling into the market.
Valuation mean reversion. MVRV at 1.25 is a three-year low. Bitcoin has traded below the true market average ($76,600) and short-term holder cost basis ($72,200) for five consecutive months—the longest deep-value period in Bitcoin’s history.
Historically rare oversold signals. This month, Bitcoin recorded its most severe relative oversold reading against the Nasdaq Index ever. Multiple high-timeframe indicators have simultaneously reached historically rare levels.
Conclusion
In summary, the Bitcoin market is currently in the process of forming a bottom zone, but whether the bottom is confirmed still requires more evidence.
From a valuation perspective, MVRV at 1.25 and Realized Price at $53,000 both indicate the market has diverged sharply from bull market valuations, entering historically bottom-associated zones. In terms of supply structure, long-term holders control 84% of supply and short-term liquidity is at a historic low, providing a foundation for potential price elasticity. From a fund flow perspective, the worst ETF outflow phase may be over, and July’s streak of inflows is a positive sign, though the July 24 single-day outflow reminds us the recovery will not be smooth.
However, historical cycle patterns suggest the bottom may not fully form until September or October. Capitulation selling by long-term holders is not yet finished. Macro uncertainty remains a key force suppressing prices.
$44,000 is not an impossible target—especially in the event of a macro black swan or renewed large-scale ETF outflows. But current on-chain signals lean toward: the market is approaching a bottom, not just beginning to fall. Bottom formation is never a single point, but a process. In this process, patience and data-driven judgment are far more important than emotion-driven decisions.
FAQ
Q1: What is the current Bitcoin MVRV ratio and what does it indicate?
As of July 23, Bitcoin’s MVRV ratio is about 1.25. This value above 1 means investors are, on average, still in profit, but it has dropped sharply from bull market highs and is near a three-year low. Historically, MVRV near or below 1 typically corresponds to bear market bottom zones.
Q2: What is Bitcoin’s current Realized Price?
The current Realized Price (on-chain average acquisition cost) is about $53,000. The spot price ($65,581) is about 19% higher than this level. Historically, every bear market low has traded at a discount to Realized Price.
Q3: How much Bitcoin supply do long-term holders currently control?
As of mid-July, long-term holders control 84% of total Bitcoin supply, while short-term traders’ share has dropped to 16%, the lowest since 2016. The supply held by long-term holders is 5.2 times that of short-term holders.
Q4: When might the Bitcoin bottom form in this cycle?
The "four-year cycle" framework suggests Bitcoin typically bottoms about 2.5 years after a halving, corresponding to September–October 2026. The macro-driven framework argues that if the Fed pivots, the current price could already be near the bottom. Both frameworks indicate the market is in the bottom zone, but the exact timing and price remain uncertain.
