Bitcoin correction nears end as 8 of 12 capitulation signals flash

Eight of 12 bitcoin capitulation signals tracked by VanEck are flashing, suggesting the correction may be nearing its end as BTC trades near $64,700.

"We expect a shallower trough this cycle," the VanEck research team, led by Head of Digital Assets Research Matthew Sigel, wrote in the firm's mid-August ChainCheck report.

All 12 indicators entered their capitulation zones at some point over the past three months, the report said. Bitcoin has remained range-bound between roughly $58,000 and $66,500 since the beginning of June, about 48 percent below its all-time high of $126,300 set in October 2025. Long-term holders shed roughly 356,000 BTC over the past 30 days to 11.84 million BTC, pushing their share of circulating supply below 60 percent for the first time in months.

Previous bitcoin bear markets have averaged 12.7 months from peak to max drawdown, putting a potential transition to accumulation in September through November based on historical cycles. VanEck cautioned that similar periods of eight to 12 indicators firing produced average 90-day and 180-day returns below baseline, with only one-year returns showing a clear edge.

Volatility Compresses as Volume Dries Up

Thirty-day realized volatility has fallen to 27.2 percent annualized, down from 30.4 percent the prior month and less than half bitcoin's long-run average of roughly 80 percent, VanEck said. Spot volume over the trailing 30 days is down 27 percent from the prior month, landing in the 10th percentile of its own history — a summer slowdown deeper than in either 2024 or 2025.

The selling was concentrated in coins held one to three years, while holders with positions older than a decade barely moved, down just 0.1 percent. Bitcoin remains about 9 percent below its 200-day moving average, a narrower gap than the 14 percent discount seen a month ago.

ETF Flows and the Wall Street Factor

The capitulation readings coincide with renewed demand for U.S. spot bitcoin ETFs, which recorded just under $300 million in net inflows on Monday, their strongest single day since May 5. BlackRock's "Re-Underwriting Bitcoin" whitepaper, released this week, attributes the drawdown to extreme leverage — futures open interest topped $90 billion with 80 percent in offshore perpetuals offering up to 125x leverage — and capital rotation into AI-themed funds, which absorbed $46 billion.

VanEck pointed to spot bitcoin exchange-traded products, a larger institutional holder base and the absence of widespread crypto lender and exchange failures like FTX, Celsius and Terra Luna as reasons the current trough should be shallower than the 78 percent to 94 percent wipeouts of past cycles.

The firm cautioned against treating the capitulation signals as short-term buy triggers, noting that historical returns following similar clusters have been mixed. The next few months will test whether Wall Street's bitcoin era can soften the bottom it could not prevent.

This article is for informational purposes only and does not constitute investment advice.