Bitcoin’s Stress Indicator Nears Historical Bottom Levels
- The onchain stress gauge for Bitcoin is near 40%, below levels seen at past market bottoms.
- Bitcoin opened June under $70,000 following a $2.43 billion outflow from spot ETFs in May.
- Cryptoquant contributor MorenoDV highlights the importance of waiting for selling exhaustion before making strong entries.
- Short-term risk-adjusted returns for Bitcoin recently hit a four-year low, echoing cycle lows from previous years like end-2015, end-2019, and end-2022.
- U.S. spot ETFs experienced their largest monthly outflow of the year in May, impacting demand significantly.
The current stress level indicator suggests that the market is absorbing significant financial stress similar to previous cycle lows, but it has not yet reached the “maximum opportunity” zone that typically signals a bottom. This aligns with other indicators showing low short-term returns and significant ETF outflows, suggesting caution is warranted.
Despite these stress signals, historical patterns indicate potential recovery after such troughs are confirmed as bottoms through selling exhaustion. Investors are advised to remain patient until clearer buy signals emerge.(Source)
