Bitcoin recovery remains fragile despite capitulation signals
Bitcoin remains in a downtrend despite emerging signs of stabilization in on-chain metrics. However, there is still no convincing evidence of a sustained recovery in institutional demand.
One of the main factors weighing on Bitcoin continues to be capital flows into U.S. spot ETFs. Although the funds recorded net inflows of $221.7 million on July 2, ending a prolonged streak of outflows, this appears to be more of an exception than the beginning of a new trend. The broader pattern over recent weeks has still been dominated by net outflows, highlighting the weakness of institutional demand.
Meanwhile, according to CryptoQuant, Bitcoin is approaching the final stage of market capitulation. The Realized P/L Ratio, which measures the balance between realized profits and losses, has fallen to its lowest level in nearly four years.
However, this indicator should not be interpreted as an immediate reversal signal. Instead, it suggests that the market is entering the late stages of capitulation—a phase that can still be accompanied by elevated volatility and additional downside attempts before a sustainable bottom is established.
Bitcoin needs to hold $62,000 to sustain recovery
A short-term descending trendline near $62,800 had been acting as a key resistance level, but Bitcoin has successfully broken above it.
As noted in our previous analysis, BTC remains in a technically weak position as long as it trades below $67,000, despite its recent recovery.
Based on current candlestick patterns, a pullback toward $62,000 appears likely in the coming days. This level previously acted as resistance but has now become an important support zone.
If $62,000 fails to hold, Bitcoin could once again retest the psychological $60,000 level.
Late-stage capitulation does not guarantee a bottom
Despite growing signs of late-stage capitulation, there is still insufficient confirmation from fundamental factors. Market participants are increasingly reaching a consensus that Bitcoin is in the final phase of the current bear market, although a decline toward $50,000 is still considered a plausible scenario.
Another risk is receiving far less attention. If the current premium valuations of AI-related companies evolve into a broader correction in the equity market, cryptocurrencies could face another wave of selling alongside stocks.
For now, however, most market participants consider this scenario unlikely in the near term.
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