Chain Analysts Note Bitcoin's Bottoming Structure as Market Digests Fear

Huo Xing Finance reports that on June 6, on-chain analyst Murphy posted that BTC fell below the $60,000 psychological level yesterday, but market losses and sentiment indicators did not worsen in tandem. The current 3-day average of the adjusted realized loss (EARL) stands at $1.13 billion, nearly halved compared to the figure on February 5. He believes this does not mean BTC won’t continue to decline, but the fact that EARL has not risen further despite lower prices represents a classic structure indicative of “bottoming expectations.” If EARL reflects market panic, STH-RUL (Short-Term Holder Relative Unrealized Loss) measures the psychological pressure faced by new entrants. During bear market declines, short-term holders typically experience a severe psychological stress threshold, where STH-RUL exceeds +5 standard deviations—corresponding to a systemic crisis. Afterward, even if prices fall further, STH-RUL rarely surpasses its prior peak, as positions have already rotated at high loss levels; new buyers enter at lower costs, and market pressure is being absorbed. Murphy believes that both EARL and STH-RUL are currently sending consistent signals: market panic is being absorbed, not spreading. Although prices are making new lows, loss indicators are not simultaneously reaching new highs. This is not a sufficient condition for a bottom, but historically, true bottoms have almost always exhibited this characteristic. Bottoming is a process of repeated pressure and absorption—until holdings complete rotation amid panic and new buyers’ cost basis becomes sufficiently low, will the price gradually lose momentum for further declines.