The cryptocurrency market has taken a huge hit over the past month. The total market capitalization decreased by about 30% from $4.27 trillion on October 6th to $2.98 trillion on November 19th. A recovery to $3.12 trillion would not change the argument. Trader opinion remains divided.
One group argues that a more severe bear market is forming. Another says the correction already looks like late-stage weakness. This work focuses on the second group. Currently, some evidence suggests that a bull market in cryptocurrencies could start sooner than expected.
Each of the five reasons below reflects one of three things: peak weakness, peak capitulation, or new purchasing power gains. Together, these may form one of the most powerful early bull cycle setups ever seen.
Short-term selling pressure appears to be nearing exhaustion
Short-term holders are selling at the fastest pace in months, which typically happens near the bottom.
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Bitcoin Munger warned of a spike in coins being sent to exchanges at a loss, while JA Maartunn highlighted a similar spike on CryptoQuant, with over 60,000 Bitcoins lost within hours. This type of panic selling often marks a “clean-up” phase before the trend moves out of bear market atmosphere.
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On-chain data backs it up. The SOPR for short-term holders fell to 0.96 on November 15th, the same level as on April 7th. SOPR, or spend return ratio, indicates whether the coins spent on-chain are selling at a profit or a loss. If it stabilizes below 1, it often indicates that a weak holder has already surrendered.
Short-term holders are important because they are the group that reacts the fastest during a correction. They panic sell faster, hit their stop loss faster, and usually fall on weakness. This is why short-term selling pressure almost always peaks near the market bottom.
After the April reset, Bitcoin rose from $76,270 to $123,345 within a few months, an increase of nearly 62%. SOPR is now back at 0.97, and the recent decline suggests that the selling pressure may be nearing burnout.
This raises the next question: Is new purchasing power being accumulated elsewhere? This is where the next metric comes in.
The power of stablecoins is rising again
If short-term sellers are nearing exhaustion, the next question is simple. Is there enough new purchasing power to push prices up?
At the moment, the stablecoin data is as follows.
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The stablecoin supply ratio (SSR) has fallen to 11.59, the lowest value in over a year. SSR compares the market capitalization of Bitcoin to the total supply of stablecoins. A falling SSR means stablecoins hold more purchasing power compared to Bitcoin. Traders sometimes refer to this as “dry powder.”
This level is even lower than the reading of 12.89 seen on April 8, the same period when Bitcoin bottomed around $76,276 before a multi-month rally. A lower SSR means a stablecoin can buy more Bitcoin per unit of supply, which typically appears near market lows.
The second confirmation comes from the RSI of SSR highlighted by analyst Maartunn. This is near 26, a level that has repeatedly matched Bitcoin’s bottom during past bear markets. The low RSI here means that the stablecoin’s purchasing power is oversold relative to Bitcoin’s size, an unusual setup that often appears before a trend change.
Taken together, the increase in stablecoin reserves and significantly compressed SSRs indicate that the market has the liquidity needed for a crypto bull market rebound.
Altcoin profit reset may be quietly strengthening the case for a crypto bull market
Short-term capitulation and low SSR already indicate that selling pressure is close to exhaustion. The next layer will be from altcoins and the reset will be even deeper.
According to the latest data from Glassnode, only about 5% of the altcoin supply is still profitable, a level typically seen in the later stages of capitulation. When nearly all holders are underwater, there is usually little left on the market to sell.
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This is similar to Bitcoin’s own wipeout, with 95% of all coins purchased in the past 155 days now underwater, more than during the coronavirus or the FTX crash.
This combination is important because altcoins often stabilize before Bitcoin when margins collapse this quickly. Although Bitcoin’s lead is still close to 60%, the difference between Bitcoin’s declining profits and altcoins’ near-zero profit levels suggests that altcoins may be nearing a foundation.
When a crypto bull market begins with a deep reset, altcoins are often the first to react simply because there is no overhead pressure left. This increases the likelihood that an altcoin-driven phase will begin first.
Sentiment Drops to Extreme Fear: Exactly How Does a Bull Market Start?
After looking at altcoin losses and Bitcoin’s underwater supply, the next factor that ties together the crypto bull market story is sentiment. The Bitcoin Fear & Greed Index fell to 10 on November 15th, its lowest level since February 27th, when Bitcoin traded around $84,718. This early number was released just weeks before Bitcoin bottomed out in April and began the same rally I mentioned earlier, going from $76,276 on April 8th to $123,345 by August 13th, a 62% increase.
This new drop to 10 is significant because extreme fear usually appears after most sell-offs. Even during the rebound in April, the index only briefly reached 18 and never returned to 10. A fall back into that range suggests that the market has already finished its emotional high.
Industry leaders like Function CEO Thomas Chen also describe this stage as desolate and emotionally torn.
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“Allocator behavior is trending towards a sharp decline with over $2.8 billion in outflows…It feels as if we are getting back to the question of do we want to hold BTC in this environment? This is similar to the 2022 Lunar Crash as the fear and greed index is in extreme fear,” he said.
This reset of fears, which comes on the heels of altcoin declines and record-low stablecoin ratios, reinforces the broader picture that the foundations of the next crypto bull market may be forming.
A new death cross just finished unfolding – and could Bitcoin react?
The final signal of a potential crypto bull market is a new death cross that formed on November 15th. A death cross occurs when the 50-day moving average falls below the 200-day moving average. Because moving averages indicate average closing prices over a period of time, this crossover often highlights the exhaustion of a trend rather than the beginning of a long-term crash.
Bitcoin fell by around 17% throughout the “cross-in” phase, leading to the final signal. This move is roughly in line with the 16% drop seen during the April Deathcross setup. That April structure worked perfectly, erasing the weak momentum, and then the April-August bull market began.
The same thing is happening behind the scenes this time. In these two market phases, prices have made higher lows, but the RSI has made lower lows. The RSI tracks momentum, and this kind of hidden bullish divergence usually suggests that sellers are getting tired. This acts like a final pressure release before the previously started uptrend continues. And this is consistent with the peak yield theory that we shared earlier.
Fred Thiel, CEO of MARA Holdings, noted that the recent breakdown reflects a macro-driven flash rather than just a chart event.
“Bitcoin’s fall below $90,000 reflects a perfect storm of macro headwinds and profit taking. Long-term holders distributed over 815,000 BTC last month, marking the most aggressive selling since 2024,” he said.
If Bitcoin rises above its recent lows, the death cross could be a new reset rather than a breakdown.
That was the case earlier this year, and is one reason why traders believe the foundations of a crypto bull market are quietly forming again. However, if Bitcoin price does not react quickly to this recently formed crossover, the start of a bull market may have to wait even longer.
