Understand the Fundamental Indicators That Precisely Mark the Bottom of BTC

The history of Bitcoin is marked by predictable boom and bust cycles, and those who can truly identify when the market hits the bottom gain a huge strategic advantage. It’s not about luck — it’s about understanding what the most reliable data is really signaling. After a decade and a half tracking Bitcoin’s movements, I’ve developed a clear understanding of which indicators actually work and, more importantly, why.

Miner Capitulation: The 100% Effective Signal

The Puell Multiple indicator specifically analyzes miners’ revenue relative to Bitcoin’s historical price. When this multiple drops below 0.5, it means miners are operating at a direct loss — electricity and equipment wear cost more than they can extract.

Here’s the key point: every time the Puell Multiple hit this critical bottom, the market was already at the bottom and a reversal happened shortly after. In 11 years of history, this relationship has been 100% accurate. Currently, in February 2026, the indicator is at 0.66 — still above the critical level, but many analysts suspect this time we might not reach 0.5, precisely because the modern market works with forward-looking information and adjusts prices before historical signals fully materialize.

Miners account for roughly 20% of all circulating Bitcoin — when they hit capitulation, it’s like a large institutional investor like Michael Saylor being forced to dump their positions to keep operations running. It’s exactly this kind of movement that determines real bottom touches.

Production Cost and the Natural Price Floor

There is an absolutely tangible economic floor for Bitcoin: the total cost miners invest to create a new coin — mainly electricity expenses and hardware depreciation. This operational cost currently ranges between $77,000 and $79,000 per Bitcoin.

With a historical success rate of 90%, whenever the price drops significantly below this level for an extended period, miners begin to liquidate their positions en masse just to keep operations alive. This is the mechanism that typically marks the actual market bottom.

Considering the current price is $65.54K, we are already close to this critical zone. If BTC remains at this level or drops significantly lower, you may observe a very clear capitulation behavior on the network.

MVRV Z-Score: When the Market Anticipates Indicators

The MVRV Z-Score works by comparing two essential data points: the current trading price of Bitcoin (Market Value) with the average price paid by holders when they last acquired or moved their coins (Realized Value). Then, the indicator adjusts this difference by Bitcoin’s historical volatility to maintain accuracy.

Currently, the Z-Score is at 0.4, while historically the market hits the bottom when this number drops to -0.3 — an 80% accuracy difference. However, the modern market with its algorithms and sophisticated traders often anticipates these signals, creating bottoms before traditional indicators fully materialize.

Applying this anticipation logic, the actual bottom could be near 0.20 in Z-Score terms, which would correspond to approximately $59,000 per BTC. This is exactly the confluence zone of multiple bottom signals we are monitoring.

Profit and Loss Supply: The Silent Indicator

Currently, 54% of on-chain Bitcoin supply is in profit, according to Glassnode data from February 19. Historically, when this percentage drops to 45% or less, we are extremely close to a genuine market bottom.

However, it’s important to adjust this metric for the current reality. Bitcoin ETFs and MicroStrategy positions (about 9.9% of the total supply) are both in loss, but they are not counted exactly the same way in on-chain data. Making this conservative adjustment, subtracting a significant portion of that 9.9%, the effective profit percentage drops to about 47%.

This means we are technically operating in a fairly typical market bottom scenario, with a small margin before reaching genuine capitulation territory.

What the Convergence of Signals Really Means

When you see these four indicators working together — miner capitulation, production cost, MVRV Z-Score, and profit supply — you’re seeing what truly matters: the fundamental behavior of the Bitcoin market.

At this moment (February 2026), with BTC trading at $65.54K and a total market cap of $1,310.53B, we have a setup where multiple indicators have converged or are converging. This is exactly the kind of confluence that historically marks lasting bottoms.

The fundamental lesson is simple: develop a trading plan based on verifiable data, not market narratives. Stick to it. The simpler and more data-driven your framework, the more consistent your results will be across multiple cycles.