This textbook indicator will tell you when Bitcoin has bottomed

Key Takeaways

• October 10 forced roughly $20B of liquidations as basis trades unwound; compressed futures‑spot spreads removed arbitrage and caused nondiscriminate selling—monitor basis spreads and 13F filings for renewed leverage.
• Systematic covered‑call selling compressed call implied volatility, turning Bitcoin into a yield asset but increasing put skew; when realized vol exceeds implied, upside exposure becomes relatively cheap—consider buying calls or call spreads.
• Watch technical breadth and momentum: RSI divergence (RSI higher low vs lower price), percent of tokens below their 200‑day/52‑week lows, and CF Broadcap Index to confirm final capitulation.
• Macro risks matter: oil shocks can spike inflation then reduce demand; weak NFP and labor deterioration raise recession/deflation risk—track Treasury supply, yields, and Fed communication for policy pivots.
• Capital is rotating: fast speculative money exited while RIAs, endowments, and sovereign wealth funds allocate to spot/ETF exposure—position sizes should reflect stickier institutional demand.
• Use token factor analysis: prioritize value metrics (fee revenue, MEV capture, staking yields), low downside‑beta and liquidity; favor value/growth exposures over high downside‑beta speculative tokens.

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