#Bitcoin Enters a Cycle Cooldown Phase as Extreme Signals Fade

On-chain cycle indicators suggest $BTC is moving into a cooling phase rather than a full capitulation. Despite price weakness from recent highs, extreme cycle conditions remain limited, indicating the market is releasing excess rather than undergoing a structural reset.

The Bitcoin Cycle Extreme Oscillator shows that recent drawdowns were not accompanied by persistent extreme spikes. Historically, cycle tops are marked by clustered and sustained extreme readings, reflecting synchronized speculative excess. In contrast, recent signals appeared briefly and faded quickly, pointing to localized profit-taking instead of broad cycle exhaustion. The declining 30-day average further supports gradual pressure release.

This view is reinforced by the Bitcoin Cycle Extremes Index, which currently sits near the mid-range (~28–30%), well below levels associated with euphoric bull extremes. Bull extreme signals have weakened since the Q3 peak, while bear extremes are present but remain scattered rather than concentrated. Volatility percentile has risen from compressed levels, suggesting redistribution rather than panic-driven deleveraging.

From a valuation perspective, the Bubble vs Crash Market Structure shows Bitcoin trading below its adjusted MVRV baseline, but not in deep undervaluation territory. Previous crash regimes required sustained MVRV breakdowns accompanied by aggressive downside acceleration, which is not yet evident.

Overall, on-chain data points to a market cooling without systemic stress. Cycle momentum has weakened, but the lack of synchronized extreme signals suggests Bitcoin remains in a transitional macro phase rather than a confirmed bear market reset.
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