Five charts to understand the current state of the Bitcoin market: Which stage are we in?

Author: Anthony Pompliano, Founder of Professional Capital Management

Compiled by: Jinse Finance

Bitcoin's price has plummeted by about 30% from its all-time high of $126,000 reached on October 6. Year-to-date, Bitcoin's price has turned negative, with a gain of less than 1% over the past 12 months. Unsurprisingly, Bitcoin holders are extremely disappointed with the asset's performance.

The online sentiment is almost the most negative I can remember. But online anecdotes can be misleading. Platforms like Reddit or X might just be echo chambers. So, what does the data actually tell us?

The following five charts explain what is happening.

1. When Bitcoin was at this price last time, global liquidity was $7 trillion lower than it is now.

First, Zerohedge data shows that "the last time Bitcoin was at this price, global liquidity was $7 trillion lower than it is now."

This data point is a significant departure from previous expectations. Everyone, including myself, anticipated that Bitcoin would narrow the gap between its price and global liquidity. Since this hasn't happened, many are questioning whether the market has fundamentally changed as Wall Street begins to embrace the asset.

Regardless of the reasons, the fact that Bitcoin has fallen by 30% in the past month and a half is undeniable.

2. This is the third 30% pullback in Bitcoin's current cycle.

James van Straten explained that this is the "third 30% pullback" in Bitcoin's current cycle. With each pullback, the time from peak to trough is getting shorter, which accelerates the spread of market panic.

• August 2024 (Yen Carry Trade): 147 days
• April 2025: (Customs Duties) 77 days
• November 2025: 42 days

3. This pullback has now entered the oversold zone.

According to CoinBureau data, "Bitcoin's daily RSI indicator has fallen to 26, the lowest level since February, indicating that Bitcoin has entered oversold territory."

4. 95% of short-term holders are in a loss-making situation.

Quinten Francois points out that similar dynamics are occurring in the profit and loss supply of short-term holders. We see that over 95% of all tokens purchased in the past 155 days are currently at a loss.

This is clearly a way to quickly trigger market panic and dampen market sentiment. But the market won't stay depressed forever. Eventually, the price of an asset will fall low enough to attract investors again. Perhaps Bitcoin will drop to $90,000 per coin, or perhaps even lower. I don't know the exact level at which the price will sustain its recovery.

5. Bitcoin whales actively buy Bitcoin.

However, Bitwise's André Dragosch stated that Bitcoin whales (those who own more than 1,000 Bitcoins) have suddenly begun actively buying Bitcoin at current price levels.

Therefore, despite the surge in global liquidity, the price of Bitcoin plummeted. Bitcoin is currently severely oversold, which has tempted Bitcoin whales to start buying again.

The fear and greed index remains below 20.

It is this volatility, chaos, and uncertainty that has shaped the experiences of Bitcoin holders over the years.

Those who remain calm when everyone else is in a frenzy have historically achieved great success. However, this is easier said than done.