Woofun AI reports that Bitcoin exhibits structural characteristics of a bear market bottom, yet definitive reversal confirmation is absent due to persistent selling pressure from long-term holders (LTHs). The on-chain analytics firm Glassnode notes that while price action suggests capitulation, the absence of stabilizing flows prevents a clear trend shift.

For the past five months, Bitcoin has traded below two critical valuation benchmarks: the True Market Mean (TMM), representing the average price of actively circulated coins, and the cost basis for short-term holders. This sustained undervaluation typically signals late-stage bear market dynamics, but Glassnode cautions that it is insufficient alone to confirm a bottom.

Notably, loss-selling by LTHs has accounted for up to 43% of all realized profit and loss during this period. Daily losses from these resilient investors reached $280 million, marking the highest level since the FTX collapse in December 2022. This behavior indicates that even the most steadfast holders are capitulating, a pattern often observed near market lows.

Institutional participation, tracked via spot Bitcoin ETF flows, shows signs of stabilization but continues to register net outflows.

Woofun AI data shows daily trading volumes have contracted sharply, hovering between $650 million and $950 million. This volume represents an approximately 80% decline from the peak reached in October 2023, suggesting that large-scale capital has not yet returned to the market in a meaningful way. The lack of substantial inflows underscores the fragility of current price support.

The derivatives market presents a divergent narrative. The put/call ratio has fallen to its lowest point this year, indicating that options traders are beginning to place cautious bets on an upside move.

However, the broader options market remains wary of downside risk, with the spot price trading well below the "Max Pain" level—the price at which option buyers would incur the greatest losses. This divergence suggests that while some traders are positioning for a rally, the market as a whole has not yet priced in a sustained recovery.

Glassnode’s analysis concludes that while the necessary conditions for a bottom exist, confirming signals have not yet materialized. A genuine reversal in sentiment would require three key developments: a reduction in long-term holder selling, stabilization of institutional demand, and a sustained recovery in price action. Without these indicators, the path to a confirmed bottom remains uncertain.