Bitcoin Cycle Metrics Hit Coldest Phase Since FTX Collapse

Glassnode reported that its Bitcoin Cycle Position Heatmap, a composite tool aggregating 45 indicators to assess market health across Bitcoin price cycles, has entered its most extended capitulation phase since the November 2022 collapse of FTX.

The heatmap, created by Glassnode co-founder Rafael Schultze-Kraft, uses color coding to represent market sentiment—blue indicates capitulation while red signals the euphoria characteristic of cycle peaks. After an euphoric phase in November 2021, the heatmap shifted to blue throughout most of 2022, coinciding with FTX's implosion and Bitcoin's bear market bottom near $15,600.

Schultze-Kraft noted the current reading sits in its coldest stretch since that event, describing it as "late in the bear, but not yet the unanimous deep blue that previously marked a floor." The tool places particular emphasis on Bitcoin holder profitability metrics, distinguishing between short-term and long-term investors. Some metrics including dormancy—measuring how long Bitcoin units remain unused in transactions—require nuanced interpretation as aging investor bases change their behavior between cycles.

Despite the capitulation signals, Glassnode's latest Market Pulse report highlighted resilience among market participants. Daily active addresses and entity-adjusted transfer volumes moved above their upper statistical bands, indicating materially strengthened onchain activity and increased network engagement. Capital outflows stabilized despite a brief market reaction to a low-entropy bug exploit affecting Coldcard hardware wallets.