As Investors Fear Capitulation, Analyst Says Bitcoin Is a Once-in-a-Generation Buying Opportunity

▲ Bitcoin (BTC)

Bitcoin (BTC) has entered an unprecedented capitulation phase, spreading fear among investors. However, on-chain data is paradoxically signaling that this could present a once-in-a-lifetime buying opportunity.

According to crypto media outlet NewsBTC on February 16 (local time), as Bitcoin’s price decline continues, market participants are entering a so-called capitulation phase, selling their holdings at a loss. On-chain analysts point out that the Market Value to Realized Value (MVRV) indicator has historically entered an undervalued zone, suggesting that the current price volatility represents a bottoming process from a long-term perspective. In particular, the Short-Term Holder SOPR, an indicator reflecting realized profits and losses of short-term holders, is currently below 1, indicating that many retail investors are liquidating their positions at a loss.

A sharp increase in realized losses flowing into exchanges is interpreted as strong evidence that market capitulation signals have reached their peak. Such declines in indicators are typically seen when panic selling nears completion and new upward momentum begins to build. Analysts note that in previous downturn cycles, Bitcoin only formed a true bottom and staged strong rebounds after large-scale realized losses occurred. While the current market structure involves temporary pain, it is being assessed as a necessary cleansing phase for a healthier rally.

Unlike retail investors engaging in panic selling, whale activity shows a contrasting trend. Analysis of data from Santiment indicates that large addresses holding substantial capital have been steadily increasing their Bitcoin accumulation during this downturn. When fear dominates the market, smart money appears to be allocating assets in preparation for the next bullish cycle. Data from unspent transaction outputs (UTXO) also confirms that long-term holders remain resilient, demonstrating that the market’s fundamentals are still intact.

The market is now watching whether Bitcoin can maintain key psychological support levels. If the current capitulation phase concludes and buying demand overwhelms selling pressure, Bitcoin could achieve a strong rebound and re-enter an upward trajectory. However, caution remains as macroeconomic uncertainties and the risk of further liquidations in the derivatives market persist, meaning that a breakdown of support levels could lead to heightened volatility. This is a critical moment to closely monitor entry points of institutional buying and changes in trading volume.

Bitcoin’s future direction will depend on whether oversold conditions indicated by on-chain metrics are resolved and on the pace of additional institutional inflows. If the current capitulation signals function not merely as a price crash but as a process of flushing out market excess, Bitcoin could establish a firmer bottom and lay the groundwork for long-term upward movement. Investors should formulate response strategies based on objective changes in on-chain data and market liquidity flows rather than emotional reactions.

Disclaimer: This article is for investment reference only and the publisher is not responsible for any investment losses arising from its use. The content should be interpreted solely for informational purposes.