Why Bitcoin holders should not overweight panic positions: on-chain signals suggest proximity to the bottom

On-chain indicator analysis provides increasingly clear clues that Bitcoin’s bear market may be approaching its bottom. According to the latest CryptoQuant data, the metric measuring the holding cost for long-term investors is gradually approaching the breakeven point between gains and losses, a level that has historically marked critical turning points before the bottom of bearish cycles. This pattern should not be ignored by those looking to overweight their positions without a clear strategy.

On-chain indicators reveal critical balance in holdings

CryptoQuant’s methodology focuses on monitoring when long-term holders are in a zone where their investments neither generate gains nor losses. When this line is activated, it has historically preceded significant upward movements. Current holding levels suggest we are approaching that crucial inflection point, which could signal the end of sustained selling pressure.

Extreme panic sentiment: End of mass selling?

The current market exhibits characteristics associated with capitulation: an extreme fear sentiment dominates participant psychology, and at the same time, there is strong accumulation of positions near the $60,000 support level. With Bitcoin currently trading at $72.54K (data as of March 5, 2026), the price has rebounded from recent lows, reinforcing the hypothesis that panic selling may be coming to an end. Multiple analyses suggest that when fear reaches these extreme levels, the market bottom is often near.

Macroeconomic factors could intensify bullish pressure

Following the release of strong non-farm payroll data, traders are focusing on January inflation indicators, whose release has been postponed. The expectation that interest rates will remain elevated for an extended period has put pressure on risky assets, but if moderate inflation surprises the market in the expected direction, it could accelerate a shift in sentiment. In this context, over-allocating to panic positions without considering these potential macroeconomic catalysts is unwise.

Conclusion: converging signals

The convergence of on-chain indicators, extreme market sentiment, and accumulation at key support levels suggests Bitcoin may be navigating its final stages of weakness. While some believe the most intense phase of panic is ending, it is prudent for investors not to reactively over-allocate but to wait for additional confirmations from technical and fundamental indicators.