When the dust settles and the market dial turns toward “hesitation,” it’s often a sign that things are shifting beneath the surface. According to crypto-on-chain analyst Murphy, investor confidence in Bitcoin (BTC) is nearing a cyclical bottom — a threshold where potential buying zones may slowly begin to form. (Bitget)
If Bitcoin fails to rebound significantly in the near term, Murphy warns, then the signal could trigger “effectively on a day next week.” (Binance)
In this post, I’ll walk through what’s driving this view, how to interpret it, and what may unfold if the momentum starts to shift.
(For clarity: This is not investment advice — just thoughtful commentary.)
The Mood in the Crypto Market: Fluctuating Sentiment
Over the last few weeks, sentiment across the crypto landscape has been wavering. On-chain data show that many of the usual bullish flags are muted or absent. For example:
- The metric called profitable supply proportion (PSIP) for Bitcoin is sitting around 72 % — already within the extreme range typically seen during bull-market corrections. (Bitget)
- Excluding lost coins, about 40 % of positions may be floating at a loss right now. (Bitget)
- Institutional flows (via spot ETFs) have cooled recently, while long-term holders (LTHs) are showing signs of unloading. (Futu News)
When these sorts of signals appear together — declining profits, fading inflows, increasing hesitation — they often mark a phase where the market is moving from confidence to caution rather than from one unbridled rally to another. That’s exactly where we seem to be. In short, the market is pausing, perhaps recalibrating.
Why This Phase Could Be Critical
There’s a reason these conditions matter. Markets are rarely linear. They cycle through phases of optimism, euphoria, correction, despair, and eventual recovery. When the majority is confident, prices tend to rise; when confidence collapses, risk aversion dominates.
At present, Murphy is essentially flagging that we’re approaching the border of “bottom territory” — not yet necessarily the absolute low, but a zone where the reward/risk math starts tilting. The rationale includes:
- If the market does rebound from here, that would suggest the capitulation phase is either over or nearly over (which is often a precursor to accumulation).
- If it doesn’t rebound, then confidence might really collapse, and the market could fall further — which itself can trigger the moment when “everyone has given up,” and historically that’s a painful but potentially opportune time to enter.
The reason this zone is interesting is because it’s where potential buying zones emerge, if one is willing to accept uncertainty and adopt a somewhat contrarian mindset.
Key Signals to Watch
To gauge whether we are truly at (or near) a bottom-forming phase, several points deserve close attention:
- Demand versus Supply Imbalance — The market is showing a structural stress: supply from long-term holders is being released, but new demand (especially institutional) is not yet picking up fully. (Bitget)
- Technical Oversold Conditions — While technicals are never foolproof, oversold readings and classic reversal patterns can heighten the probability of a turn. For example, recent readings suggest the market is in a “hesitation zone” rather than full panic. (Blockchain News)
- Macro & Liquidity Context — Liquidity is one of the biggest drivers of crypto performance. The interplay between central-bank policy, global liquidity flows and risk-asset appetite continues to matter. (BeInCrypto)
- Sentiment Extremes — True buying zones often emerge when retail sentiment is deeply negative and major participants are either exiting or sidelined. Right now, we’re seeing signs that retail selling is nearing exhaustion. (Bitget)
When multiple of these align — supply stress, weak demand, oversold technicals, distressed sentiment — you get the setup for a potential “turning point.” That’s what Murphy appears to be highlighting.
Pause. Stop. Let’s Dive Into the Potential Buying Zone
If you’re someone who tracks the space — whether for long-term allocation or tactical exposure — this is the section where you want to lean in. Because if the puzzle pieces fall into place, a “buying zone” may begin to emerge soon.
What does that mean in practical terms?
- We might see a stabilisation of price around key cost bases for long-term investors.
- Outflows may slow, and ETF/large buyer flows may begin creeping higher again.
- On-chain metrics (like unrealized losses, distribution by old cohorts) may show signs of “last man standing” action.
- If a rebound is triggered, the price may leap not simply because of new demand, but because fear begins to recede and momentum shifts.
Importantly, this zone doesn’t guarantee a rally. What it does offer is a higher expected value relative to entering earlier when risk-of-further-downside is higher.
What Might Happen Next
If the thesis holds, here’s a plausible chain of events:
- Short-term pause/hold — Bitcoin might consolidate in a range as sellers exhaust and buyers test the waters.
- Clear signal day — As Murphy suggested, if there’s no rebound, one day next week might trigger the moment when the market realises it’s at a thin margin for error. That trigger could spark renewed interest.
- Early accumulation — Patient, savvy investors begin adding exposure (or increasing) in identified zones, possibly ahead of full-blown recovery.
- Second wave of institutional flows — Once confidence starts to tick up, funds, pensions and wealth-managers may gradually re-engage, helping to underpin a more sustained move.
- Risk of false-start — If liquidity remains weak or macro shocks intervene (e.g., rate surprises, regulatory headwinds), then the zone could be tested again or re-break lower.
In short, we may be at the cusp of something meaningful — but nothing is guaranteed. The key advantage of recognising the zone in advance is that you can size your exposure and mindset accordingly: less fear of missing out, more tolerance for risk, more focus on patience.
How to Approach If You’re Considering Entry
Here are some thought-starters (again, not personal advice) for how you might approach this phase:
- Define your risk budget — Know how much of your portfolio you’re willing to commit, and what you’re okay with losing.
- Stagger entry — Rather than a full-scale entry at one price, consider multiple tranches as you watch for confirming signs (e.g., flows improving, on-chain metrics stabilising).
- Focus on time-horizon — If you’re long-term (5-10 years+), then these near-term fluctuations matter less; if you’re short-term (6-12 months) you may want clearer signals.
- Watch macro & liquidity — Keep tabs on central-bank commentary, liquidity conditions, ETF flows and institutional behaviour. These can make or break a rally attempt.
- Don’t over-leverage — Especially in a phase where confidence is low, using high leverage can turn opportunity into pain quickly.
- Be ready to step back — If the setup fails (markets break key support, flows collapse further), then recognising that possibility and exiting or reducing exposure is just as important.
The Broader Takeaway
When an asset class like Bitcoin is moving into a hesitation zone, it doesn’t feel exciting. That’s actually a good sign. Markets rarely start new up-trends with fanfare; they begin with quiet, subtle shifts in behaviour, sentiment, demand and supply. If Murphy is correct in his reading, then what we’re seeing now is not the exuberance stage, but the calm before the storm — the stage where confident buying quietly begins.
Of course, the caveat remains: if the rebound fails, then that “quiet phase” could turn into a deeper draw-down. That’s the risk you face when venturing into “buying zones” before the crowd has convinced itself. But for those willing to accept that risk, the potential reward may be disproportionately favourable relative to entering later when everyone is already excited.
Final Thoughts
We’re approaching a moment of choice. For the market: will Bitcoin hold in this zone and begin to build a base? Or will it slip further and prolong the period of doubt? For investors: will you wait for confirmation (and possibly pay a higher price), or act now with eyes open to both upside and downside?
Right now, the signals suggest we’re closer to the bottom than the top of the cycle — but that’s not the same as the bottom itself. If you align your approach with the idea of potential buying zones rather than sure things, you position yourself more flexibly and less emotionally.
Keep watching the supply/demand metrics, monitor the flows, stay mindful of macro influences—and if that clear “signal day” comes next week, you’ll be ready to interpret it rather than be surprised by it.
Sources:
- “Analysis: Bitcoin’s current price shows ‘almost no bubble,’ with nearly 40% of holdings at a loss.” (Bitget)
- “Capital outflows and cooling sentiment… Structural adjustment in Bitcoin supply and demand.” (Bitget)
- “Bitcoin Price Could Drop to $92K as Analyst Warns Amid …” (Yahoo Finance)
- “Bitcoin’s Next Price Roadmap: Macro Forces and Spot ETFs.” (BeInCrypto)
