Analyst: Multiple indicators on the chain show that Bitcoin has bottomed out after a significant drop

ChainCatcher news, according to CoinDesk, the crypto market experienced a significant drop on Tuesday, with multiple on-chain indicators showing that Bitcoin prices have bottomed out.

According to data from TradingView, the total market capitalization of cryptocurrencies reached $2.7 trillion, down nearly $1 trillion from the peak in December 2024. Several indicators suggest that Tuesday's sell-off may mark a local bottom.

Andre Dragosch, Head of Research at Bitwise Europe, pointed out that the crypto asset sentiment index shows numerous signals of contrarian buying. The overall pessimism in liquidity, on-chain data, and the derivatives market indicates that downside risk is relatively limited. At these price levels, the risk-reward outlook appears quite favorable.