Bitcoin went through two distinct capitulation phases this summer, leaving many investors uncertain about where the market is headed. But for on-chain analyst James Check, the data tells a very different story.
In his view, the cycle bottom may already be behind us — set at around $58,000 — and clinging to the idea of a new lower low would be a fundamental analytical mistake.
It’s a thesis that cuts against the prevailing sentiment, and one that deserves to be broken down point by point.
Two Capitulations, One Signal: Has the Market Already Flushed Out?
James Check, a widely respected on-chain analyst and a regular contributor to Glassnode publications, identifies two successive capitulation events as key markers of this cycle. These episodes — characterized by heavy selling under pressure, often accompanied by cascading liquidations — have historically preceded significant recovery phases in Bitcoin.
The first capitulation occurred during the sharp summer plunge, when BTC shed a significant portion of its value within days. The second followed shortly after, once again testing short-term buyers and forcing weak hands out of the market. This double flush of the order book is, according to Check, a strong structural signal: the market has absorbed the selling pressure.
On the on-chain side, metrics such as the Short-Term Holder SOPR (Spent Output Profit Ratio) and Realized Loss reached levels consistent with previous cycle bottoms. These indicators measure, respectively, the profitability of recently moved coins and the scale of realized losses — two data points that, when they hit extremes, typically signal seller exhaustion.
Don’t Anchor to the October Low: The Classic Cycle Mistake
One of the most striking points in James Check‘s analysis concerns the cognitive bias that pushes traders to anticipate a return to the October low as an inevitable reference point. This phenomenon of psychological anchoring is well documented in behavioral finance: investors tend to overestimate the significance of a recent price level, even when market conditions have fundamentally shifted.
Check explicitly warns against this mindset. Waiting for a pullback below $58,000 based on an October low could mean missing the bulk of a bullish move if the cycle has already turned. In previous Bitcoin cycles — notably 2019–2020 and 2022–2023 — the market did not always offer a second entry opportunity at the absolute floor.
This reading is reinforced by the structure of the Realized Price broken down by investor cohort: long-term holders (LTH) have broadly maintained their positions, while short-term holders (STH) absorbed the bulk of the losses. This transfer of wealth from weak hands to strong hands is a recurring pattern during cycle transition phases.
What On-Chain Data Is Really Saying About Current Momentum
Beyond James Check‘s thesis, several independent on-chain metrics support the idea of a market in a rebuilding phase. Bitcoin‘s Net Unrealized Profit/Loss (NUPL) sits in a zone historically associated with pre-bull accumulation phases — far from the euphoria levels that typically precede cycle tops.
Meanwhile, the Exchange Net Position Change — which tracks the net flow of BTC moving in or out of centralized exchanges — shows a clear trend of coins being withdrawn to private wallets. This behavior, typical of long-term accumulators, mechanically reduces the available selling pressure on the spot market.
Finally, Miner Revenue has stabilized following the shock of the April 2024 halving, suggesting that miners have adjusted their operations without triggering further waves of forced selling. If the $58,000 floor holds as a structural support level, the next major resistance zone to watch sits between $72,000 and $74,000 — the range of the pre-election all-time highs.
