Bitcoin Cycle Extremes Index Hits 8.8%: Compression Phase Signals Expansion Ahead

Bitcoin is trading at a critical level after losing the $110,000 support, a zone that had previously provided bulls with a strong defensive ￰0￱ recent breakdown underscores fading momentum, as buyers struggle to regain control following weeks of ￰1￱ breaking above its all-time high, BTC has shown no meaningful signs of recovery, fueling speculation that the market could be entering a deeper corrective ￰2￱ pressure continues to mount, and investors are now focused on whether Bitcoin can stabilize before further downside ￰3￱ the bearish tone in price action, onchain data paints a more nuanced ￰4￱ to CryptoQuant, the Bitcoin network is currently in a compression phase.

Historically, these phases act as precursors to expansion periods marked by heightened volatility and large directional ￰5￱ pattern suggests that while short-term conditions appear weak, the groundwork is being laid for the next significant swing in market ￰6￱ coming days will be ￰7￱ must reclaim key levels to avoid further capitulation, while bears see room for another leg ￰8￱ way, the compression phase indicates that a major breakout—up or down—could be approaching, making Bitcoin’s current position one of high stakes and high ￰9￱ Cycle Extremes Index Signals Compression Phase Crypto Analyst Axel Adler has recently shared insights into the Adjusted Bitcoin Cycle Extremes Index, a tool designed to measure market conditions based on volatility within halving ￰10￱ index combines several key on-chain metrics—SOPR (Spent Output Profit Ratio), MVRV (Market Value to Realized Value), NUPL (Net Unrealized Profit/Loss), and NVT (Network Value to Transactions)—to provide a broader picture of where Bitcoin stands in its ￰11￱ present, the index is reading 8.8%, which places Bitcoin firmly within a bottom zone close to compression.

Historically, such compression phases have acted as precursors to expansion, where price and network activity experience heightened volatility and directional ￰12￱ simple terms, the market is currently in a quiet stage, storing energy for the next major ￰13￱ are divided on what comes ￰14￱ argue that this compression marks the end of the bull cycle, one that began in 2023 and delivered over 600% gains from its ￰15￱ this perspective, Bitcoin’s recent loss of momentum and inability to hold above $110K may be early signs of a prolonged corrective ￰16￱ the other hand, a growing camp of analysts sees this compression not as an ending but as a launchpad for the next leg ￰17￱ institutional inflows, global adoption, and whale accumulation still strong, they believe Bitcoin could surprise the market by pushing further into uncharted territory.

Ultimately, the compression-to-expansion dynamic suggests that the coming months will be ￰18￱ this phase resolves in a bullish continuation or the beginning of a macro correction, Bitcoin is approaching a pivotal moment that will define the next chapter of its ￰19￱ Hold Demand Amid Bearish Pressure Bitcoin (BTC) is currently trading around $109,697, showing modest recovery after recently dipping below the critical $110K ￰20￱ chart highlights how BTC remains under heavy selling pressure, with price action struggling to regain momentum following the rejection near $123K, a level that marked the most recent local ￰21￱ daily moving averages emphasize the market’s fragile ￰22￱ 50-day SMA is beginning to slope downward, while the 100-day SMA hovers near $111,700, acting as a resistance ￰23￱ BTC fails to reclaim this level, sellers could push the price back toward the 200-day SMA around $101,300, which represents the next major support ￰24￱ structure suggests BTC is in a consolidation-to-correction ￰25￱ sharp decline from August highs signals fading bullish strength, and despite attempts at recovery, the price remains capped below short-term ￰26￱ must reclaim $112K–$115K to shift momentum; otherwise, continued weakness could invite deeper tests of $105K–$101K.

Bitcoin sits in a make-or-break zone, where holding above $109K could stabilize sentiment. However, without strong buying support, the risk of another leg lower persists, especially if broader market volatility continues to weigh on risk ￰27￱ image from Dall-E, chart from TradingView