Murphy

It's been a long time since the last update on PSIP (Profit Supply Percentage of BTC), the last time I wrote about it was back on December 10, 2025 (see citation).

At that time, we estimated that if PSIP=50% was used as the bear market bottom range, then the pricing range would be around $62,000.

Have there been any new changes since then?
Definitely! The closer we get to the calculation results, the more accurate they become.

Looking back at history, we can find a detail:

During the 2014-15 cycle, the PSIP at the bear bottom range fell around 40%-45%; the same goes for the 2018-19 cycle. After that, during the Black Swan event on March 12 and the bear bottom in 2022, PSIP never fell below 45% again.

From a theoretical perspective, over time, the low-cost "profit chips" that are lost or held long-term will increasingly accumulate; thus, the PSIP is bound to be higher than before, almost an inevitable trend.

Based on this, we can infer: the PSIP at this bear bottom is very likely not to fall below 45%!

It is most likely to fall within the ranges of 50%-55% or 45%-50%. As of April 5, the PSIP is approximately 55%, already at the "upper edge" of the expected range mentioned above.

Therefore, when BTC approaches this range, from a rational perspective, it should not be overly bearish anymore.

Can you imagine? The average cost of all the losing chips currently is not 100,000, not 110,000, but only $93,600!

In other words, under the current loss structure, as long as BTC rises back to 93,000, it can allow the average of the losing chips to break even (the red line in the chart).

Although there are still many chips trapped above, it can be concluded that during the two rapid declines at the end of last year and the beginning of this year, a large number of high-position trapped chips must have chosen to cut losses and leave the market, which lowered the average cost of the overall floating loss chips.

This is what we usually understand as — washout!

This value has a deviation coefficient of 1.4 compared to the current 30-day average BTC price, while in the past three bear market bottoms, the deviation coefficients have at least exceeded 2.0 (the blue waveform below).

Greater than or equal to 2.0 represents that when entering the absolute bottom range, BTC's price is less than half of the "average cost of losing chips".

To meet this condition, BTC must drop to $46,800.

If it doesn't drop to that level, then this will be the most special bear market in history! Because in terms of "degree of pain", it is much lighter than any previous bear market.

Will this law be broken in this round? Personally, I think it "is very likely to"......
(That is, I do not believe it will drop this low)

Of course, if it really happens, then what are you hesitating for? Just "sell a kidney"!

Q1 2026 is a winter period for the cryptocurrency industry, with participation declining, liquidity shrinking, and trading volume sluggish. Even the 'landlord's family' should be having a tough time.

In CoinGlass's research report, liquidity is concentrating in the leading players, capital is concentrating in derivatives, and trust is seemingly concentrating in the giants, which has become an inevitable trend.

For instance, Binance ranks first in four key dimensions: derivatives trading volume, open interest, trading depth, and user capital commitment, demonstrating a clear leading advantage.

Especially in user capital commitment, it accounts for as high as 73.5% in CEX.

This is not merely about high trading volume; trading volume can be supported by activities or market-making strategies. However, the long-term retention of capital reflects user stickiness and usage habits.

Based on this, I conducted further validation using on-chain data. According to Glassnode's data, among Binance's reserve assets:

USDT reserves increased from $24.6 billion at the low point to $43.8 billion during the market transition from bull to bear. Although there was a temporary decline from January to March 2026, it quickly rebounded (Figure 1).

In contrast, BTC reserves have been even more stable. Over the past five years, there was only one sudden drop during the FTX collapse (November 2022), after which it consistently recovered and remained above 550,000 coins (Figure 2).

The more reserve assets an exchange has, the more user assets correspondingly exist.

This also indicates that after experiencing a round of public opinion turmoil, users ultimately cast their 'trust votes' with their funds.

Data does not lie. In this protracted winter, the market's clamor has been stripped away, leaving only the most genuine survival cards.

The appearance of this signal means that starting from April 2, 2026, BTC has officially entered the second half of the bear market!

At least in terms of on-chain data, we are almost 100% certain of this. Because this situation is by no means common.

The yellow line and the orange line in the chart represent the on-chain average turnover cost for holding BTC for 1-2 years and 1-3 months, respectively; they have now crossed.

To analyze the logic behind this signal, you must first understand why the orange line decreases when the price drops, while the yellow line increases.

Previously, I wrote a tweet that explained in detail the principle of STH-RP not following price changes, which is fundamentally different from the 120d-ema in candlestick indicators. Interested friends can look it up themselves.

I won't repeat too much here; in short, you just need to know that this is a highly valuable effective signal.

As of March 31st, the latest CVDD (Cumulative Value Destroyed) has reached $45,410, an increase of only $506 compared to the data in the tweet on February 10th (see citation), indicating a very slow rate of increase.

The CVDD algorithm uses CDD (Cumulative Value Destroyed Days) in the numerator, meaning that when BTC is spent, the time value held by the original investor is simultaneously reset to zero.

Therefore, the slow increase suggests that during this period, early large holders have significantly reduced or even almost completely stopped participating in on-chain trading.

CVDD is one of the few indicators that has never "failed" since the inception of BTC! That is, the price of BTC has remained above CVDD every day; the bottom of the bear market has only approached it infinitely, but has never fallen below it.

If this cycle continues this pattern, it means that even if BTC experiences a "final drop," it will not fall below $45,500. There is a maximum potential drop of -30% from the current level, but the actual drop is likely not that large.

Based on the current relative deviation between the BTC price and CVDD (see the green arrow in the chart), similar deviations occurred on the following dates over the past 15 years: February 5, 2015; November 27, 2018; and June 22, 2022.

The prices over these three days are very close to the subsequent true bottom.

We might be unwilling to accept the theoretical maximum drop of -30%, or feel that the current risk-reward ratio is not yet favorable, so we can wait.

Alternatively, you could start dollar-cost averaging (DCA) in BTC now, or wait for an opportunity with a higher probability of occurrence and closer alignment with CVDD.

However, this is not investment advice, but simply a reminder that you should plan ahead.

On the 27th drop, the entity-adjusted realized loss (EARL) was 562M. The scale of the loss positions is not large, indicating that this is not a renewed release of panic sentiment, especially since just recently (February 5th) there was a significant panic liquidation (EARL: 2.9B).

As long as there are no extreme unexpected events, we are probably in the 'nothing left to sell' phase after the significant liquidation. However, liquidity is exhausted, and any slight movement can make prices more sensitive.

Looking back at the last cycle, EARL was around 500M, roughly equivalent to the period from July to November 2022 (the dollar value of realized losses generated under pessimistic sentiment is close). There was also a wave of significant panic liquidation at the beginning of July (Luna exposure, EARL: 2.7B).

Therefore, we can continue to observe this logic: if BTC subsequently reaches lower prices but EARL does not set a new high, then that would be a clearer bottoming signal.

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Note: EARL excludes on-chain transfers between addresses within the same entity cluster, meaning that 'internal transfers' do not generate any value.

The Russia-Ukraine conflict has led the United States to kick Russia out of SWIFT; the Middle East crisis has made capital flows and cross-border settlements points of pain. It is precisely for this reason that some emerging economies around the world, especially in the Middle East and Central Asia, are particularly eager to achieve financial sovereignty.

However, under the narrative of sovereign digital infrastructure, SIGN precisely fills this gap of "verifiable + programmable + sovereign control" demand.

The reason this cycle has not seen a "shanzhai season" like previous cycles is fundamentally that 99% of projects cannot find real demand, only infinite supply. SIGN's approach is that "to achieve large-scale adoption, it must be deeply integrated with sovereign governments."

Relying solely on a pure on-chain system can only serve niche groups. To truly reach hundreds of millions of users and trillions of assets, it must interface with the sovereign framework. For example, in 2025, the U.S. government provided over $800 billion in contracts to companies such as SpaceX, Anduril, and Palantir.

Currently, Sign is building two major systems:
1. Digital currency system: supports central bank digital currencies (CBDCs) and compliant stablecoins;
2. Digital identity system: a national-level verifiable credential layer that allows governments to securely issue and verify identities across agencies, enabling real-time settlements.

Of course, this path has a very high threshold. But once entered, the system will be deeply embedded in national processes, and the replacement cost in the future will also be very high. For example, the Digital SOM CBDC pilot in Kyrgyzstan uses Sign as an evidence layer to achieve real-time auditing, reducing the KYC time for users from several days to a few seconds.

Now, after launching on Binance, SIGN has gradually established stable liquidity, with a 24-hour trading volume reaching $90 million according to CoinMarketCap, remaining active in a bear market. It is believed that projects with real products and market fit will have strong risk resistance capabilities during low market conditions.

The Chinese meaning of UP/UL-ACVR is: the percentage of the average unrealized profit and loss ratio of each BTC being higher than the current value in historical trading days. I won't explain the principle in detail, as it may complicate the reading experience.

Let's get straight to the conclusion: all historical bear bottoms occur during the decline of ACVR (red line), meaning "no decline, no bottom."

So now that we see ACVR has just started to turn, it indicates that the bear bottom may not have appeared yet, but it can be confirmed that it is certainly getting closer.

Seeing this, combined with data from URPD (chip structure), PSIP (profit percentage), and other indicators, I personally believe that we should no longer have excessive bearish expectations.

Statements like "2w/3w seen" should just be left unsaid, as it is highly unlikely to reach that point. Unless the world faces another severe threat to human existence like a super black swan.

Regardless of the external winds, I still believe in my own judgment.

Now, for individuals or institutional investors facing severe financial pressure, every $1,000 rebound in Bitcoin is a torment. It's like the market is giving you a multiple-choice question: you have the opportunity, will you sell?

If you sell, it's like stabbing yourself; if you don't sell, there may be something even worse coming for you later... If you haven't experienced it, it's hard to empathize with this pain.

Because of this, often in the second half of a bear market, unexpected black swans appear because everyone can't hold on anymore. A small wave of panic and anxiety can trigger larger-scale and deeper losses and liquidations.

Of course, you could also think of this as a bottom signal.

I saw some friends mention that it could also be an arbitrage order. Indeed, this possibility cannot be ruled out, but based on the current three-month rolling basis annualized returns, it is lower than the yield of U.S. Treasury bonds during the same period, so the conditions for large capital arbitrage are not sufficient.

From the "MVRV Extreme Deviation Model", BTC is currently attempting to break through the green line (-0.5 std) repeatedly. Looking at historical data, in a major downtrend, whenever there is resistance at the upper limit of a key range, or repeated resistance, the probability of continuing downward is greater (see the red arrows in the image).

Of course, there are also instances of "false breakouts". Smaller timeframes must obey larger timeframes, so here short-term long positions should not be stubborn; what truly deserves a heavy bet is the larger trend. Before that, if we can reach or get close to the lower blue line (currently around $51,000), it would be perfect... Let's throw the cup and go for it!