Bitcoin Flashes Bottom Signals, but Traders Aren’t Convinced

Bitcoin may be nearing a critical turning point, after briefly falling below its February low and rebounding from June support, placing the cryptocurrency within a range that has historically marked durable cycle bottoms.

Bitcoin's rebound has eased some of the panic that followed last week's selloff. Yet data from Glassnode and CryptoQuant suggest investors remain cautious, as the market remains on edge — not yet ready to call a bottom.

Glassnode's latest options market analysis shows the recent Bitcoin selloff triggered a short-lived spike in volatility expectations. 

One-week implied volatility — a common options-market gauge of future turbulence — briefly climbed to 65%, before retreating to around 40%.

Demand for downside protection followed a similar pattern. One-week skew, which measures how much traders are paying for downside protection relative to upside exposure, jumped from 12% to 28% during the decline before falling back to around 12%.

Despite the normalization in volatility metrics, options flow remains defensive. Glassnode reported that put buying accounted for roughly 30% of premium traded over the past seven days, compared with 20% for call options. 

The analytics firm also noted that the largest cluster of negative gamma exposure sits near the $65,000 level, above Bitcoin's recent spot price. According to the report, dealer hedging activity could amplify upward price moves if BTC reclaims that level.

Separately, CryptoQuant analyst MorenoDV highlighted that Bitcoin is moving into a zone historically associated with bottom formation, but the on-chain structure still points to capitulation, not confirmation.

According to him, Bitcoin's Short-Term Holder Market Value to Realized Value (STH MVRV) ratio has declined toward the 0.75-0.80 range. The metric measures whether recently acquired coins are being held at a profit or loss.

Historically, this zone has coincided with local bottoms as weaker holders capitulate and exit positions. However, MorenoDV noted that each rally since 2024 has produced lower highs and lower lows in the MVRV structure, indicating weakening demand momentum.

Another metric, the Adjusted Spent Output Profit Ratio (aSOPR), is also approaching levels historically associated with seller exhaustion. The seven-day moving average is currently near 0.96, a threshold that has coincided with major capitulation events since 2019.

According to CryptoQuant, confirmation of a durable bottom would require both aSOPR to reclaim and hold above 1.0 and STH MVRV to recover above its break-even level.

“A price bounce alone is necessary but insufficient, without both metrics flipping, this stays an oversold market, not a regime change,” the report noted.

Bitcoin is approaching levels that previously marked local market bottoms, making current on-chain signals closely watched by investors. At the same time, defensive options positioning suggests institutional and sophisticated traders are not yet convinced a durable recovery has begun.

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