Two closely followed market indicators suggest that capitulation may already be underway, but analysts caution that the most difficult phase could still be ahead.

Bitcoin is trading near levels historically associated with the latter stages of bear markets and has managed to remain there despite the strongest U.S. inflation reading in more than three years.

According to data from Checkonchain, BTC recently declined toward its 200-week moving average—a long-term trendline closely monitored by veteran investors. The firm’s valuation model places bitcoin within the lowest 10% of its historical range, a level reached only during the most severe downturns of previous bear markets.

Investor sentiment remains equally depressed. The Crypto Fear & Greed Index, which tracks market mood using factors such as volatility, social activity, and trading volume, has fallen to 9, firmly in the “extreme fear” category. The index stood at 11 a week ago and 48 just one month earlier.

Such readings often emerge after the bulk of selling pressure has already passed. However, Checkonchain notes that market bottoms rarely form overnight. Instead, periods of capitulation are often followed by months of range-bound price action that gradually wears down investors who remain in the market.

Bitcoin briefly slipped below the $60,000 mark this week for the first time since 2024 before recovering. It was trading at $62,623 on Thursday, up 1.9% on the day but still lower for the week as continued ETF outflows weighed on demand.

The broader crypto market also posted modest gains. Ether advanced 1.4% to $1,651, BNB rose 1.3% to $595, Solana added 0.9% to reach $65, and Dogecoin gained 1.1% to $0.085. XRP underperformed, falling 0.3% to $1.12. Despite Thursday’s rebound, all major cryptocurrencies remained in negative territory over the past seven days, with Ether down 6.5% and XRP losing 7.5%. The latest gains have only softened the weekly decline rather than reversing it.

Persistently high inflation continues to challenge the outlook for a swift recovery. U.S. consumer prices increased 0.5% in May from the previous month and 4.2% year-over-year, marking the fastest annual pace since early 2023. Rising energy costs linked to the conflict involving Iran were a major contributor, according to data released Wednesday by the Bureau of Labor Statistics.

The core inflation measure, which excludes food and energy prices, rose 0.2%, coming in below economists’ expectations and providing the lone encouraging sign in an otherwise strong inflation report.

“Hopes for meaningful U.S. crypto regulation have weakened once again, with Polymarket odds of the Clarity Act passing in 2026 falling from 62% to 48% this week,” said Yves Renno, Head of Trading at Wirex, in comments to CoinDesk.

“Attention is now focused on the June 16–17 FOMC meeting. The tone adopted by policymakers will likely determine whether Bitcoin rebounds toward the $68,000–$72,000 range or falls decisively below $60,000.”

Pressure is not limited to digital assets. Global stock markets dropped to their lowest levels in more than a month as a technology-driven selloff intensified and U.S. military strikes on multiple targets in Iran shattered a ceasefire that had been in place since April.

MSCI’s All Country World Index, a widely followed benchmark for global equities, fell to its lowest level since May 5, while its Asia-Pacific index declined 0.8% to a three-week low. Brent crude climbed 1.8% to roughly $95 per barrel. Meanwhile, the European Central Bank was expected to raise interest rates later Thursday for the first time since September 2023, with bond markets increasingly pricing in higher borrowing costs around the world.