Two key market indicators are flashing signs of capitulation, but analysts warn that Bitcoin’s toughest test may still be ahead.
Bitcoin is hovering near valuation levels typically seen only in the final stages of bear markets and has remained resilient despite the strongest U.S. inflation reading in more than three years.
Data from Checkonchain show BTC recently drifted toward its 200-week moving average, a long-term trendline closely watched by seasoned investors. According to the firm’s model, bitcoin is now trading within the bottom 10% of its historical valuation range—a zone reached only during the deepest bear-market drawdowns.
Market sentiment paints a similarly bleak picture. The Crypto Fear & Greed Index, which measures investor mood through factors such as volatility, trading activity, and social media engagement, has fallen to 9, firmly in “extreme fear” territory. The index stood at 11 a week ago and 48 just a month earlier.
Historically, such readings emerge after most panic selling has already taken place. However, Checkonchain cautions that market bottoms are often a drawn-out process. Capitulation may mark the beginning, but prolonged periods of sideways trading frequently follow, testing the conviction of remaining holders.
Bitcoin briefly slipped below $60,000 this week for the first time since 2024 before recovering. The cryptocurrency was trading at $62,623 on Thursday, up 1.9% on the day but still lower on a weekly basis as persistent ETF outflows continued to weigh on prices.
The broader crypto market also posted modest gains. Ether climbed 1.4% to $1,651, BNB rose 1.3% to $595, Solana added 0.9% to $65, and Dogecoin gained 1.1% to $0.085. XRP lagged the pack, slipping 0.3% to $1.12. Despite Thursday’s rebound, all major tokens remained in the red over the past seven days, with Ether down 6.5% and XRP off 7.5%.
Inflation remains a significant obstacle to a sustained recovery. U.S. consumer prices rose 0.5% in May from April and 4.2% year-over-year, the fastest annual increase since early 2023. Higher energy prices, driven in part by escalating tensions involving Iran, were a major contributor to the increase.
The core inflation measure, which excludes food and energy costs, rose 0.2%, slightly below economists’ expectations and offering the only notable relief in an otherwise strong inflation report.
“Hopes for U.S. regulatory clarity have faded again, with Polymarket odds of the Clarity Act passing in 2026 dropping from 62% to 48% this week,” Yves Renno, Head of Trading at Wirex, told CoinDesk.
“Attention is now turning to the June 16–17 FOMC meeting. The Fed’s tone could determine whether Bitcoin rebounds toward the $68,000–$72,000 range or breaks decisively below $60,000.”
The pressure extends beyond cryptocurrencies. Global equity markets fell to their lowest levels in more than a month as a technology-led selloff intensified and renewed military action involving Iran rattled investor sentiment.
MSCI’s All Country World Index dropped to its lowest level since May 5, while its Asia-Pacific benchmark fell 0.8% to a three-week low. Brent crude gained 1.8% to around $95 a barrel. Meanwhile, investors are bracing for tighter financial conditions globally as the European Central Bank is expected to deliver its first rate hike since September 2023.
