Bitcoin “capitulation basket” hits longest streak since FTX, says Glassnode

Bitcoin’s on-chain “capitulation” phase has stretched to its longest stretch since the aftermath of the FTX collapse, according to Glassnode. In a Monday update, the firm pointed to its composite cycle-tracking framework showing that a large share of Bitcoin price-related indicators has remained in its most defensive, low-conviction stage through 2026.

The key nuance is that, while conditions resemble late-cycle stress, Glassnode’s heatmap readings have not yet fully matched the deepest “floor” signatures that appeared during earlier bear-market bottoms. At the same time, Glassnode’s latest Market Pulse report suggested that on-chain activity has strengthened—an important counterpoint for investors weighing whether capitulation is finally giving way to stabilization.

Key takeaways

• Glassnode’s “Bitcoin Cycle Position Heatmap” shows 45 tracked BTC price metrics have been in the longest capitulation phase since late 2022’s FTX fallout.
• Rafael Schultze-Kraft said the current period sits in its coldest stretch since FTX, but still not at the unanimous deep-blue level that historically marked cycle floors.
• The heatmap uses a basket of 45 indicators, heavily incorporating investor profitability across short-term (STH) and long-term (LTH) holders.
• Glassnode reported stronger network engagement, including daily active addresses and entity-adjusted transfer volumes moving above upper statistical bands.

Heatmap extends capitulation longer than past cycles

Glassnode’s “Bitcoin Cycle Position Heatmap,” created by the platform co-founder Rafael Schultze-Kraft, aggregates data from 45 different Bitcoin price and market-health indicators. In the heatmap, blue shading is associated with capitulation conditions, while red is used to highlight the euphoria typical of late-cycle momentum toward peaks.

The tool flipped from a more euphoric configuration after November 2021 into a majority-blue dominance throughout 2022. That shift coincided with the collapse of FTX, which occurred in late 2022 and aligned with analysts pointing to Bitcoin’s bear-market bottom around $15,600, according to earlier coverage referenced from Cointelegraph.

Schultze-Kraft’s latest read of the heatmap emphasizes both duration and depth. He said the current stage is “its coldest stretch since FTX” and is late in the bear market cycle, but remains “not yet the unanimous deep blue” that had historically indicated a more definitive floor.

For traders and long-term investors, this matters because cycle-position models are often less about predicting a specific day and more about gauging whether market behavior is approaching the “reset” phase that follows widespread distribution and forced risk reduction.

Why profitability and holder behavior shape the signal

Beyond conventional price gauges like market cap, the heatmap places significant weight on the profitability of Bitcoin’s investor base. It divides participants into short-term holders (STH) and long-term holders (LTH), reflecting that these cohorts typically react differently during sell-offs and recoveries.

Schultze-Kraft also highlighted an additional complication: some indicators change character as the composition of the investor base ages. One example is dormancy, measured by how many days a unit of BTC spent idle before being moved on-chain. Because dormancy tends to increase as the chain ages, the dormancy signal can differ between cycles—meaning the same threshold may not “mean” the same thing across different bear markets.

That kind of calibration is crucial when interpreting heatmap results. A long capitulation stretch can be read two ways: either distribution is still ongoing, or the market has moved into a prolonged sideways grind where participants are not capitulating in the most extreme fashion yet. Glassnode’s framing—that the readings are colder than prior periods but not at maximum floor conditions—leans toward the second interpretation.

Network activity improves even as capitulation persists

While the cycle heatmap focuses on sentiment and cycle-stage indicators, Glassnode’s Monday Market Pulse report pointed to strengthening on-chain behavior. The firm reported that daily active addresses and entity-adjusted transfer volumes moved above their upper statistical bands, a change it characterized as a “notable increase” in network engagement and economic throughput.

That improvement matters because it suggests a degree of market function is returning even if the broader cycle signal still shows capitulation characteristics. In other words, activity may be shifting from panic-driven flows toward more sustained utilization, which can be an early ingredient of stabilization.

Glassnode also noted that stabilization of capital outflows persisted despite investor reaction to a separate security event: a low-entropy bug exploit in Coldcard hardware wallets. The implication is that even if some participants reacted defensively to the news, the broader on-chain throughput did not collapse further.

Supporting this, CryptoQuant data cited by Cointelegraph compared a rise in on-chain transfers of 1 BTC or less with the pattern seen after the FTX implosion. Specifically, it noted that on July 31 the daily tally reached 39,600 BTC, compared with 39,900 BTC on Nov. 16, 2022. The comparison underlines how transaction behavior can echo prior stress periods, even when the macro timeline differs.

What to watch next as the signal matures

Glassnode’s heatmap suggests Bitcoin is in the coldest stretch since FTX, but not yet in the “unanimous” conditions that previously aligned with a more decisive bottom. Investors should watch whether the heatmap continues deeper into its most extreme blue regime while on-chain activity remains elevated—especially daily activity and transfer volumes—as those combinations would strengthen the case that capitulation is transitioning into a more durable stabilization phase.