Something unusual is happening right now. In the middle of an active geopolitical conflict, Bitcoin is breaking out of a multi-week range and showing clear strength against equities. The S&P 500 is struggling. Gold is pulling back. Oil is consolidating. Yet Bitcoin is showing relative strength.
When assets start moving in different directions during a stress event, it is worth paying attention. But before drawing bullish conclusions, the on-chain data raises a harder question: is this a real bottom, or just a relief rally?
Bitcoin breaks out while equities struggle
Bitcoin’s daily candle recently closed well above $70,000. This level had a capped price for several weeks and now appears to be flipping into support. Price traded as high as $74,000 intraday, the strongest level since early February.
Volume had been building before the breakout, not just after it. That kind of structure tends to suggest accumulation rather than a reactive spike. The On Balance Volume (OBV) had been in a bearish trend since the market topped, but there are early signs it may be turning. If OBV breaks its downward trend while price holds above $70,000, that could add conviction to the bullish case.
The next potential upside target is the $80,000 to $85,000 zone, the next major resistance area.
Bitcoin and the S&P 500 moved in opposite directions
The S&P 500 is sending a very different signal. The index has traded below its weekly 20-period exponential moving average (EMA) for the first time since the April 2025 selloff. That level has historically been a reliable indicator of trend direction during bull markets. The RSI is showing a clear bearish divergence, printing lower highs while the price pushed to new highs earlier this year. OBV has also broken lower, pointing to declining participation behind recent moves.
The CBOE Volatility Index (VIX) spiked to its highest level since November this week, briefly touching 28 before pulling back. Readings in the mid-to-high 20s indicate elevated fear, but not outright panic. The VIX remaining well above its long-run average of 20 suggests markets are pricing in sustained uncertainty, not a single event.
This is the core of the current story. A week ago, Bitcoin was selling off alongside equity futures as the Iran strikes hit weekend markets. Now it is moving higher while the S&P 500 stalls between range support and resistance. Whether this decoupling holds is the key question.
Gold (XAU/USD) is pulling back after its initial safe-haven surge, finding support near $5,100. Brent crude is around $84 after spiking on the Iran news, with $85 as the next major resistance. Both assets have made their big initial moves and are now consolidating. Bitcoin’s continued momentum stands out against that backdrop.
The weekly RSI is deeply oversold. That is not a clear bottom signal
Bitcoin’s weekly RSI is sitting at around 32, deep in oversold territory. Many traders are reading this as a bottom signal, and historically, these levels have come before significant bounces.
But the historical record is more complicated than that.
When Bitcoin’s weekly RSI has reached these levels during structural downtrends, price has often continued lower by 30% to 40% before a genuine bottom formed. An oversold weekly RSI can mark the start of a potential accumulation phase. It does not mean price has to stop here.
The broader weekly structure still shows a downtrend, with lower highs and lower lows from the November 2025 peak above $120,000. The $85,000 area is the key level to watch. It sits at approximately the 0.618 Fibonacci retracement of the latest downward move and lines up with the 20-week EMA. Until that zone is reclaimed, the broader trend has not reversed.
What the MVRV score is telling us
The MVRV (Market Value to Realised Value) score is one of the clearest on-chain tools for identifying genuine cycle bottoms. It compares Bitcoin’s current market cap against the average cost basis of all coins in circulation. When the score falls into the historically low zone, it has reliably marked major lows.
At current levels, we are not there yet. In previous bear markets, the MVRV Z-score fell to 0 or below before a sustained recovery began. The current reading suggests the market is oversold relative to recent history, but has not reached the capitulation levels seen at prior cycle bottoms.
This does not mean a bottom cannot form from here. It means the on-chain data is not yet providing the same confirmation that past bottoms have offered. The weekly RSI may signal we are getting closer. The MVRV score suggests patience is still warranted.
What the accumulation data shows
The Accumulation Trend Score (ATS) measures balance changes across wallet cohorts, with greater weight given to larger entities. It has moved from strong distribution (below 0.1) to a fragile balance of around 0.43. Aggressive selling has eased, but 0.43 is not conviction-driven accumulation. For that signal, the ATS would need to move toward 1.0. Large-entity buyers have not yet stepped in with force.
The broader profitability picture adds further caution. Approximately 9.2 million BTC are currently held at a loss. The percentage of supply in profit has fallen to around 57%, breaking below its minus-one standard deviation threshold. Glassnode notes that readings at this level have historically appeared in the early stages of deep bear markets, most notably in May 2022 and November 2018.
ETF flows remain in a persistent outflow. Spot CVD (Cumulative Volume Delta) has turned negative across major venues, reflecting active selling rather than organic buying. The 90-day Realised Profit/Loss Ratio has fallen below 1.0, confirming an excess loss environment and limited market liquidity.
There are some constructive signs. Sell pressure is easing at the margin. The $60,000 to $69,000 demand zone has been held so far, supported by medium-term holders who accumulated during the first half of 2024. Panic hedging in the options market appears to be fading. These are not bottom signals on their own, but they do suggest the most intense phase of selling may be moderating.
Key levels to watch
The current setup has two competing narratives. On the price side, Bitcoin’s decoupling from equities during an active conflict is a meaningful signal. The breakout above $70,000 with pre-breakout volume has technical credibility.
On the on-chain side, the picture is more cautious. The MVRV score has not reached historic capitulation levels. The ATS is at a fragile balance. Nearly a quarter of Bitcoin’s supply is held at a loss. ETF outflows are continuing. These conditions are more consistent with a relief rally or stabilisation phase than a confirmed cycle bottom.
- Bitcoin: Holding above $70,000 keeps the short-term bullish case intact. A move toward $80,000 to $85,000 opens the next major decision point. A weekly close below $65,000 raises the probability of a deeper move toward the $60,000 demand zone.
- MVRV Z-score: Watch for a move into the historically low capitulation zone. Until then, treat bounces as potential relief rather than structural reversals.
- Accumulation Trend Score: A sustained move toward 1.0 would signal that large entities are buying with conviction. That is the most important on-chain confirmation for a durable recovery.
- S&P 500: The index wicked below the weekly 20 EMA but has not confirmed a sustained break. A weekly close back above it and toward the local range highs around 6,900 could ease macro pressure and support the decoupling narrative. A confirmed weekly close below 6,750, and toward the 6,500 weekly 50 EMA, could drag Bitcoin lower with it.
The weekly RSI may be telling us we are getting close to something. The on-chain data suggests a little more patience may still be needed.
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Source: https://ambcrypto.com/primexbt-bitcoin-breaking-from-equities-during-the-middle-east-conflict-but-does-the-on-chain-data-confirm-a-bottom/
