Is Now the Bottom in Bitcoin? Evaluating Cyclical Bottom Indicators Amid a Structural Market Shift

Bitcoin's recent 30% correction from its October 2025 peak of $126,000 to $93,575 has reignited debates about whether the asset has reached a cyclical bottom. While short-term volatility persists, a confluence of on-chain metrics, macroeconomic dynamics, and structural market shifts suggests that Bitcoin may be nearing a critical inflection point. This analysis examines the interplay between cyclical indicators and the transformative forces reshaping Bitcoin's market structure to determine whether the current price level represents a strategic entry point.

Cyclical Indicators: A Tipping Point?

Bitcoin's price action in late 2025 aligns with historical mid-cycle corrections, which typically precede late-cycle accelerations. The Bitcoin Everything Indicator, a composite model integrating macroeconomic, on-chain, and technical data, suggests the asset remains in a favorable position within its price cycle, with room for further appreciation before reaching overbought conditions. On-chain metrics reinforce this view: the MVRV Z-Score and SOPR indicate that Bitcoin is not yet overheated, but significant upside potential remains if the Z-Score continues to rise toward historical thresholds associated with recovery phases.

Post-halving supply dynamics also point to a tightening of Bitcoin's float, with 74% of circulating BTC currently illiquid and 75% not moved in six months or more. This reduced float creates a structural tailwind for price appreciation, as fewer coins are available for selling pressure. Meanwhile, the realized loss margin has approached levels historically linked to market bottoms, suggesting a potential near-term stabilization.

However, technical indicators like SuperTrend remain bearish, reflecting lingering short-term uncertainty. This tension between bullish on-chain fundamentals and bearish near-term momentum underscores the complexity of assessing a cyclical bottom.

Structural Market Shifts: A New Era for Bitcoin

Beyond cyclical patterns, Bitcoin is undergoing a profound structural transformation driven by institutional adoption and regulatory clarity. The launch of spot Bitcoin ETFs has catalyzed a surge in capital inflows, with these funds collectively holding over $115 billion in assets by late 2025. This institutionalization has reduced Bitcoin's volatility-average daily volatility has dropped from 4.2% to 1.8% since ETFs debuted-and redefined its role as a strategic asset for corporate treasuries and institutional portfolios.

Entities like El Salvador and MicroStrategy continue to accumulate Bitcoin, signaling enduring conviction in its long-term value. Meanwhile, the asset's integration into traditional financial systems has elevated its sensitivity to macroeconomic factors such as real yields and liquidity flows. As noted by analysts, Bitcoin is increasingly treated as a macro asset, with its price trajectory now more closely tied to global market sentiment and monetary policy than in previous cycles.

Macro Factors: Challenges and Opportunities

The current macroeconomic environment presents both headwinds and tailwinds. A strong U.S. Dollar Index (DXY) has historically moved inversely to Bitcoin, and any reversal in DXY strength could provide upward momentum. However, elevated U.S. yields and constrained liquidity have challenged Bitcoin's inflation-hedge narrative. Geopolitical tensions, such as Trump's proposed 100% tariff on rare earths from China, have also triggered liquidity crunches, exacerbating short-term volatility.

Despite these challenges, long-term institutional holders remain resilient. Corporate treasury adoption and ETF inflows have created a structural uptrend, with Bitcoin maintaining a floor above $100,000 despite recent selloffs. Analysts argue that the current correction represents a cyclical adjustment within a broader adoption phase rather than the onset of a "crypto winter."

Conclusion: A Bottom in the Making?

The interplay between cyclical and structural forces suggests that Bitcoin's current price level may represent a strategic inflection point. On-chain metrics like the MVRV Z-Score and SOPR, combined with a tightening float and institutional buying, indicate that the asset is nearing a cyclical bottom. Meanwhile, structural shifts-driven by ETF inflows, corporate adoption, and macroeconomic integration-have created a foundation for long-term appreciation.

While macroeconomic headwinds persist, the resilience of institutional demand and the reversal of M2 money supply contraction could catalyze a return to higher prices. For investors, the key question is not whether Bitcoin will recover, but whether the current correction offers a disciplined entry point into an asset that is increasingly shaping the future of global finance.