Bitcoin (BTC) could be on track to establish a major cycle bottom near $50,000 within the next two months, according to a trading analysis.
The analysis, shared by TradingShot in a TradingView post on August 5, was based on the Coin Value Days Destroyed (CVDD) indicator, one of the most reliable signals for identifying long-term market lows.
The outlook comes as Bitcoin remains in the final stages of its current bear cycle following a sharp decline in June.
Since then, BTC has been consolidating around the shifted CVDD level, a pattern that has historically preceded the final downward leg before a cycle low is established.
TradingShot noted that the actual CVDD is currently near $48,100 and continues to trend slightly lower. Based on historical behavior, a direct test of this level would place Bitcoin’s next major bottom around $50,000.
CVDD is an on-chain valuation metric that tracks Coin Days Destroyed, a measure of long-term holder activity, while incorporating the U.S. dollar value of transferred coins.
The indicator is widely used to identify periods when Bitcoin is significantly undervalued and approaching a long-term floor.
CVDD Bitcoin historical trend
Historical data shows the indicator has accurately identified major Bitcoin bottoms across multiple market cycles. The CVDD was tested twice during the 2022 bear market, once during the 2018 and 2020 cycle lows, twice in 2015, and it also aligned closely with Bitcoin’s 2011 bottom.
Notably, during the last two bear cycles, the cryptocurrency spent at least four months trading around the CVDD before recovering. In 2015, a touch of the shifted CVDD alone was enough to mark the cycle low, suggesting a direct test of the indicator can establish a market bottom.
Based on these patterns, the analyst expects Bitcoin to reach the CVDD zone within the next two months, potentially bottoming near $50,000 before a new bullish phase begins.
The analysis also highlights the 50-week moving average. Historically, after Bitcoin bottoms at the CVDD level, a break above the 1W MA50 has confirmed the start of a new bull cycle.
Bitcoin’s recovering network activity
The bearish outlook contrasts with improving on-chain activity. In this regard, data shared by market analyst Ali Martinez shows Bitcoin network participation is increasing, with weekly active addresses climbing 20% to more than 720,000.
Rising network activity is often viewed as a sign of strengthening user engagement and growing demand for the blockchain.
As for price action, Bitcoin continues to trade below the key $65,000 level as the cryptocurrency remains in a period of consolidation. At press time, BTC was trading at $64,066, up nearly 1% over the past 24 hours.
