Author: Claude, Shenchao TechFlow
DeepOcean Summary: Bitcoin has dropped from its October last year high of $126,000 to the $60,000 range, a decline of over 50%. Renowned trader Doctor Profit, who accurately shorted this downturn, has announced a full closure of his short positions and entered a long position at $64,000, stating that structural variables have rewritten the four-year cycle script. On-chain analyst gumsays noted that the weekly bullish divergence has persisted for 147 days, nearing the 161 days observed before the 2022 bottom. However, cycle researcher Jake Pahor identified common characteristics of every bear market bottom since 2014 and found that this cycle scores zero on three criteria: duration, number of extreme fear days, and breakdown below realized price. The market is currently torn between "pre-positioning" and "waiting for confirmation signals."
Bitcoin has declined from its all-time high of approximately $126,000 in October last year to the $60,000 range, experiencing a maximum drawdown of over 54%. This bear market has now lasted nine months, and the focus of debate is shifting from "how much lower will it go?" to "has the bottom been reached?"
On July 19, renowned crypto trader Doctor Profit, known for accurately shorting this downturn, posted a lengthy thread on X announcing he had closed all his short positions and began buying Bitcoin spot at $64,000. The post garnered over 2.13 million views and quickly became a focal point in the crypto community. On the same day, cycle researcher Jake Pahor offered a sharply contrasting view on his Substack column, CryptoSuperHub: he analyzed 5,279 days of data since 2012 and found that every bear market bottom since 2014 met three specific criteria—none of which have been met in this cycle.
Doctor Profit has fully closed his short positions, stating that the bottom of the four-year cycle will arrive earlier than expected.
Doctor Profit called it a "report of the century" in his post, revealing that all short positions established since September 2025 have been closed: Bitcoin shorts in the $115,000 to $125,000 range, shorts in the $79,000 to $82,000 range, and over 100 altcoin short positions—all locked in profits.
He entered the market by buying spot Bitcoin at $64,000, employing a structured position-building strategy: daily, he allocates 5% of his designated funds to buy spot Bitcoin as long as the price remains between $54,000 and $64,000. He buys at $58,000, continues buying at $56,000, and increases his buying pressure if the price falls below $54,000.
The core logic of going long lies not in technicals, but in fundamentals. Doctor Profit believes the market mainstream is still waiting for the "four-year cycle bottom" in September or October, but this consensus itself is a warning sign. "The market doesn't reward those who memorize calendars. When everyone is waiting for the same date, the bottom often arrives earlier."
He listed several variables transforming the Bitcoin market structure: The CLARITY Act may pass the Senate by August 10; BlackRock, Vanguard, JPMorgan, Goldman Sachs, and the New York Stock Exchange have joined DTCC’s security tokenization pilot, with Microsoft stock, SPY, QQQ, and U.S. Treasuries being tested as tokenized securities, with official launch scheduled for October; Citadel has just invested $400 million in Crypto.com at a $20 billion valuation.
His assessment: Trillions of dollars in institutional capital are waiting off-market to enter, while tokenization and regulatory legislation are advancing in tandem. Retail investors are posting on X, saying they’re waiting to enter at $40,000 to $50,000—but the largest capital is already moving. “I won’t stand behind the herd, bidding at the same price everyone else is. I’m running ahead.”
Doctor Profit maintains his full S&P 500 short position. He believes the cryptocurrency market entered its bear phase in October 2025, several months ahead of the stock market, and has already undergone repricing. A stock market crash that triggers capital flows from overvalued assets into the undervalued crypto market could instead serve as a catalyst.
Gumsays: The weekly bullish divergence has been ongoing for 147 days and is approaching the level of the previous bottom.
On-chain analyst gumsays posted the same day, providing technical support arguments.
His observation is that the price action on Bitcoin’s weekly chart closely resembles the bottom of the 2022 cycle. During the 2022 cycle, a weekly bullish divergence lasted 161 days before Bitcoin made a new low and confirmed the cycle bottom; in the 2026 cycle, this divergence has now lasted 147 days—just about two weeks short of the duration seen in 2022.
Gumsays’s conclusion is gentle but clear: “When you already have a good price, trying to wait for the absolute bottom is meaningless. If you buy at $60,000 to $64,000 and add more at $45,000, your average cost will still be excellent for the next bull market.” But he also added a risk warning: “There’s no guarantee it will drop to $45,000.”
All three bottoming conditions were unmet in this cycle.
Jake Pahor presented the most systematic counterargument this week in the CryptoSuperHub weekly newsletter on July 19.
He reviewed 5,279 days of CSH risk score data since February 2012 and identified three common characteristics at the bottom of each bear market cycle since 2014:
First, the time span. The bear market cycles since 2014 have each lasted approximately 12 months from peak to trough. With this cycle’s peak occurring in October 2025, the 12-month window corresponds to the fourth quarter of this year. Only nine months have passed so far.
Second, the duration of extreme fear. The CSH risk score has fallen below 20 prior to each bear market bottom and remained in that range for an extended period. During the 2014–2015 bear market, it stayed below 20 for 275 days; in 2018, it was 52 days; and in 2022, it was 123 days. So far in this cycle, the score has not dropped below 20 even once, with its lowest point being 21.5 on July 1.
Third, the price has fallen below the realized price. The realized price is the weighted average of the prices at which all bitcoins were last transferred on-chain, representing the collective cost basis of the entire market, currently around $53,000. In previous bear market bottoms, the price has always dropped below this level. The June low of $57,000 came close but did not touch it.
Zero out of three conditions met. This is why Jake Pahor refuses to join the "bottom is in" camp.
But he is not purely bearish.
In the article, he acknowledged the validity of the bullish case: this pullback has been shallower than in previous years at this stage; ETFs, as a buying force that did not exist in 2018 and 2022, may provide stronger bottom support for this cycle, and over half of all Bitcoin were already at a loss at the June low—a condition that has historically coincided with market bottoms.
Jake Pahor’s approach reflects his mindset: he continues his weekly dollar-cost averaging as usual (at scores between 20 and 30), but places larger buy orders only below a score of 20, where they remain untriggered. “If the bottom has been reached, my weekly investments at scores above 20 will perform well. If the bottom hasn’t been reached yet, my larger orders are waiting below 20, ready with capital in place. The plan accounts for both outcomes—prediction can only account for one.”
He also provided a set of historical backtesting data: buying Bitcoin when the CSH score was between 20 and 30 (the current range) resulted in a median return of +132% over 12 months, with losses occurring on only 6% of trading days; buying when the score was above 60 resulted in a median negative return.
Two key time windows and one data anchor point
From the perspectives of multiple traders and analysts, the core of the current divide can be summarized as one question: Are the structural variables of ETF demand and regulatory legislation sufficient to break this cycle free from historical patterns?
Doctor Profit believes the answer is yes, betting that the bottom has arrived early and going fully long. Jake Pahor believes the evidence is insufficient to overturn historical patterns, opting for a systematic entry while maintaining a larger position to wait for more extreme signals.
As of July 19, Bitcoin was trading at approximately $64,800, with the 200-week moving average near $63,000, placing the price just above this long-term support level. The Fear & Greed Index stood at 25 (extreme fear).