Bitcoin Metrics Show Longest Capitulation Since FTX Collapse

Bitcoin is currently experiencing its most extended period of capitulation since the conclusion of the 2022 bear market, according to data from the onchain analytics firm Glassnode. The platform highlighted that its comprehensive Bitcoin Cycle Position Heatmap has remained in a predominantly cold state throughout much of 2026, marking the longest such stretch observed since the dramatic collapse of the FTX exchange in late 2022.

The heatmap aggregates information from 45 distinct Bitcoin price metrics to provide a broad overview of market conditions across various phases of the price cycle. When the majority of the indicators display blue tones, it signifies a capitulation phase, whereas red hues typically reflect the heightened euphoria seen near cycle peaks. Following an intense euphoric period in November 2021, the heatmap shifted heavily toward blue for most of 2022, coinciding with the FTX failure that aligned with Bitcoin reaching its prior bear market low around 15,600 dollars.

Extended Capitulation Phase Persists Into 2026

Glassnode co-founder Rafael Schultze-Kraft observed that the current readings represent the coldest phase since the FTX event. Although conditions remain late in the bear market cycle, the aggregate has not yet reached the deep unanimous blue levels that characterized previous market bottoms. The tool places significant emphasis on investor profitability metrics, separating short-term holders from long-term holders to assess overall market health more precisely.

Certain indicators within the basket require careful interpretation because their behavior evolves across cycles. One such metric is dormancy, which measures the average number of days a Bitcoin unit remains inactive before being spent in an onchain transaction. Due to the maturing investor base, dormancy levels tend to rise over successive cycles, necessitating a more refined approach when interpreting signals for potential cycle reversals.

Onchain Activity Strengthens Amid Market Stress

In its most recent Market Pulse report, Glassnode noted positive developments in network engagement despite the ongoing capitulation signals. Daily active addresses and entity-adjusted transfer volumes have exceeded their upper statistical bands, pointing to a meaningful rise in overall network participation and economic activity on the blockchain. This resilience among market participants stands out even as certain investors reacted sharply to recent security incidents.

A notable spike occurred in transactions involving one Bitcoin or less following a low-entropy bug exploit affecting Coldcard hardware wallets. Analytics from CryptoQuant showed that the daily count of such smaller transfers climbed to 39,600 BTC on July 31, nearly matching the 39,900 recorded on November 16, 2022, immediately after the FTX implosion. This similarity underscores how external shocks continue to influence transaction patterns during periods of market uncertainty.

The prolonged capitulation phase suggests that while Bitcoin has not yet reached the extreme bottom conditions seen in prior cycles, the market continues to work through a challenging environment. Investors and analysts will likely monitor the heatmap closely for any shifts toward warmer readings that could indicate the beginning of a recovery phase.