Bitcoin may finally be entering the exhaustion phase that has marked every short-term bottom over the past two years, with analysts pointing to renewed correlations with U.S. equities and $88,000 as the critical level to watch.

Fresh data from CryptoQuant shows the Short-Term Holder SOPR — an indicator tracking whether recent buyers are selling at a profit or a loss — dropped to 0.94 earlier this week as BTC drifted between $80,000 and $90,000.
Readings below 1.0 indicate capitulation among newer market participants, a pattern that has consistently aligned with local bottoms followed by swift rebounds.

This dynamic has played out repeatedly: in early 2023, late 2023, mid-2024 and now again this month. Each episode saw short-term holders locking in losses during heavy sell-offs, after which liquidity consolidated into stronger hands and price action stabilized.

CryptoQuant said the latest move reflects “loss realization,” not structural weakness, suggesting the downturn is being driven by aggressive unwinding rather than deterioration in long-term positioning.

The market structure supports that view. Bitcoin’s break below $90,000 occurred largely during U.S. trading hours, while equities rallied on softer consumer data and rising expectations of a December Federal Reserve rate cut.
That rebound in risk assets briefly pushed BTC back above $89,000 on Monday night before the price slipped toward $87,000 as U.S. markets closed.

According to FxPro analyst Alex Kuptsikevich, crypto’s recovery remains tightly correlated with equities, with BTC showing little independent momentum. He described the recent bounce as “a counter-trend move within a broader seven-week decline” and said a decisive reclaim of $88,000 is still required to validate a local bottom.

Other market signals also point to bottom-forming behavior. Open interest in derivatives has dropped sharply, suggesting most leveraged long positions have been cleared. Funding rates have normalized, and perpetual futures are trading near flat after a week of persistent negative funding — historically a condition that precedes short-term reversals.

With Federal Reserve officials leaning more openly toward easing and global risk appetite improving, the stabilization in SOPR may be the first sign that sellers are finally exhausting their momentum.