Bitcoin Nears Critical 4-Year SMA as Powerful Capitulation and Accumulation Signals Converge

Global cryptocurrency markets are witnessing a pivotal technical event as Bitcoin, the leading digital asset, tests a historically significant long-term average. This convergence of on-chain data and price action suggests a potential shift from a prolonged bearish phase to a new cycle of accumulation. Analysts globally are scrutinizing whether the current alignment of fading capitulation and strengthening accumulation signals near the 4-year Simple Moving Average (SMA) will mark a definitive turning point for the flagship cryptocurrency.

Bitcoin’s 4-Year SMA: A Historical Inflection Point

The 4-year Simple Moving Average represents a crucial long-term trend indicator for Bitcoin, closely tied to its halving cycle. Historically, prices trading below this level have often signaled deep bear market conditions. Conversely, sustained moves above it have frequently preceded major bull markets. Currently, Bitcoin’s price action is testing this key benchmark, creating a tense environment for traders and long-term holders alike. This technical level has served as a reliable barometer of market sentiment across previous cycles, making its current test particularly noteworthy for 2025’s market structure.

Market data from major exchanges shows increased volatility around this price zone. Furthermore, the 4-year SMA has acted as a robust support and resistance level since Bitcoin’s inception. For instance, the 2018-2019 bear market found a definitive bottom after prolonged interaction with this average. Similarly, the 2014-2015 cycle exhibited identical behavior. This pattern underscores the metric’s psychological and technical importance within the cryptocurrency ecosystem. The current test follows a significant market correction that began in late 2024, drawing parallels to previous cyclical lows.

The Mechanics of Long-Term Market Cycles

Technical analysts emphasize that the 4-year SMA is not a standalone indicator. Its power derives from confluence with other metrics. When price approaches this average alongside specific on-chain signals, the probability of a major trend reversal increases substantially. This model filters out short-term noise and focuses on macroeconomic and cyclical forces shaping Bitcoin’s valuation. The model’s track record provides a framework for understanding potential market transitions, though experts caution it is not a predictive crystal ball.

Deciphering the Fade of Capitulation Signals

Capitulation refers to the final phase of a bear market where discouraged investors sell their holdings at a loss, often leading to a sentiment extreme. Key on-chain metrics that gauge capitulation have shown a marked decline in intensity over recent weeks. The Realized Cap HODL Waves metric, which tracks the age of coins being moved, indicates a reduction in spending from long-term holders—a classic sign that panic selling is subsiding. Additionally, exchange net flows have stabilized, suggesting less urgent selling pressure onto platforms.

Another critical indicator, the MVRV Z-Score, which compares market value to realized value, has moved away from extreme undervaluation zones seen during past capitulation events. While not yet in bullish territory, its recovery from historic lows aligns with a cooling of panic. Data from blockchain analytics firms shows the percent of supply in profit has also begun to stabilize after reaching multi-year lows, further supporting the capitulation fade thesis. This collective shift in on-chain behavior is a prerequisite for any sustainable market recovery.

• Reduced Exchange Inflows: The volume of Bitcoin moving to exchanges (a precursor to selling) has decreased significantly.
• Stable Coin Destruction: The rate at which coins are being spent at a loss has slowed, indicating fewer distressed sellers.
• Sentiment Recovery: Fear & Greed Index readings have lifted marginally from ‘Extreme Fear’ levels, though remain cautious.

The Strengthening Pulse of Accumulation

Parallel to the fading capitulation is a clear strengthening of accumulation signals. Accumulation occurs when investors, often larger entities or committed individuals, consistently buy assets during periods of low prices or negative sentiment. On-chain data reveals a notable increase in accumulation addresses—wallets with a non-zero balance that only receive Bitcoin and never spend. The growth rate of these addresses has accelerated, suggesting a methodical build-up of positions.

Furthermore, the balance held by long-term holders (entities holding coins for over 155 days) has stopped declining and has begun a tentative ascent. This ‘HODLer’ base is often considered the smart money within Bitcoin’s ecosystem. Their renewed accumulation, particularly by entities often labeled as ‘whales,’ provides a strong counter-narrative to retail fear. Glassnode’s Accumulation Trend Score has also shifted, showing entities are accumulating at a higher rate relative to their historical behavior.

The Confluence: A Setup for a Turning Point

The simultaneous occurrence of these two phenomena—fading capitulation and rising accumulation—creates a powerful technical setup. Historically, such convergences near key long-term moving averages like the 4-year SMA have marked cycle lows. This pattern does not guarantee an immediate vertical price rally. However, it often establishes a strong foundation for the next bullish phase by transferring assets from weak hands to strong hands. The market structure shifts from distribution to re-accumulation.

This phase is frequently characterized by sideways or volatile price action within a range, frustrating both bulls and bears. The critical factor for confirmation will be Bitcoin’s ability to reclaim and hold the 4-year SMA as support, turning it from resistance into a launchpad. Failure to do so could prolong the bear market, but the alignment of on-chain signals currently favors a more constructive outcome. This process mirrors the re-accumulation phases observed in 2015 and 2019, which lasted several months before decisive breakouts.

Expert Context and Macro Backdrop

Financial analysts note that this technical setup coincides with broader macroeconomic developments. Institutional adoption pathways, such as spot Bitcoin ETF flows, continue to evolve. Regulatory clarity in major jurisdictions is gradually improving. Furthermore, the upcoming Bitcoin halving cycle remains a fundamental driver of long-term scarcity. While technicals and on-chain data provide a short-to-medium-term framework, these macro factors underpin the multi-year thesis for Bitcoin. Experts from firms like CoinMetrics and CryptoQuant consistently highlight the importance of monitoring these confluence points, as they offer high-probability, though not certain, signals of trend change.

Conclusion

Bitcoin’s approach to its 4-year Simple Moving Average represents a critical technical juncture, amplified by the powerful alignment of fading capitulation and strengthening accumulation signals. This confluence has historically marked significant turning points in Bitcoin’s market cycles. While past performance never guarantees future results, the current on-chain and technical setup provides a data-driven case for a potential transition from a bear market to a re-accumulation phase. Market participants should monitor Bitcoin’s ability to consolidate above the 4-year SMA for confirmation, as this would signal a robust shift in market structure and long-term holder confidence.

FAQs

Q1: What is the 4-year Simple Moving Average (SMA) for Bitcoin?
The 4-year SMA is the average of Bitcoin’s closing price over the last 1,460 days. It is a long-term trend indicator that has historically acted as major support during bull markets and resistance during bear markets, often aligning with Bitcoin’s halving cycle.

Q2: What does ‘capitulation’ mean in cryptocurrency markets?
Capitulation is the final phase of a bear market where investors, overwhelmed by negative sentiment and losses, sell their holdings en masse. It is often marked by extreme fear, high volume sell-offs, and is considered a sign that a bottom may be near as selling pressure exhausts itself.

Q3: How is ‘accumulation’ measured in on-chain analysis?
Accumulation is measured by tracking wallets that only receive Bitcoin and never spend (accumulation addresses), monitoring declines in exchange balances (coins moving to cold storage), and observing increases in the supply held by long-term holders (entities holding coins for over 155 days).

Q4: Has this signal alignment happened before?
Yes, similar alignments of price nearing the 4-year SMA while capitulation metrics faded and accumulation strengthened were observed in late 2015 and early 2019. Both periods preceded major multi-year bull markets, though they were followed by months of sideways consolidation first.

Q5: Does this mean the price will go up immediately?
Not necessarily. This setup suggests a higher probability of a cycle low forming, but it often leads to a prolonged period of base-building or re-accumulation. Immediate, sustained vertical rallies are less common than a transition to a volatile, range-bound market that establishes a new foundation.