Two separate CryptoQuant indicators compiled by analyst Amr Taha are simultaneously flashing readings that have historically appeared near significant Bitcoin market bottoms. Neither guarantees a repeat. Both are worth understanding.
The Derivatives Index Reading
The Binance Derivatives Market Index is a composite indicator measuring overall momentum in Bitcoin’s derivatives market on Binance, combining open interest, funding rates, and futures trading volume into a single reading between 0 and 1. Higher readings reflect strong derivatives momentum. Lower readings reflect weakness and reduced speculative positioning.
The index currently sits at approximately 0.30, below the 0.43 reading recorded in April 2025 and approaching the 0.27 to 0.31 range seen during July to August 2024. Both prior instances of readings at these levels appeared during periods that preceded significant Bitcoin price recoveries. The July to August 2024 bottom at 0.27 came before Bitcoin ran from approximately $54,000 to its all-time high above $108,000. The April 2025 reading of 0.43 preceded a recovery from $74,000 back toward $108,000.
The current 0.30 reading reflects derivatives momentum that has unwound almost entirely from the elevated levels seen during the late 2025 bull run. Low derivatives momentum means fewer speculative positions, less leverage, and reduced open interest. That combination historically represents a market where most weak hands have already exited and the setup for a momentum rebuild is cleaner than it would be with elevated positioning still present.
The STH Market Cap Signal
The Bitcoin Short-Term Holder Market Cap measures the total market value of Bitcoin held by short-term holders at current prices. It reflects how much recent capital is exposed to immediate price volatility and reactive selling behavior.
The STH Market Cap has fallen sharply to approximately $390 billion, below the $437 billion recorded on April 7, 2025. The April 2025 decline in this metric preceded a capitulation event on April 8 as Bitcoin sold off before eventually recovering from approximately $78,000 to above $108,000.
Large declines in STH Market Cap indicate capital exiting or forced liquidations among recent buyers. When this metric falls significantly it means recent entrants have largely been washed out, either selling at a loss or having their positions liquidated. What remains is a holder base with lower average cost and therefore less immediate selling pressure.
What Both Signals Together Suggest
Two independent indicators measuring different things, derivatives momentum and short-term holder positioning, are both sitting at levels that have historically appeared before significant recoveries. The derivatives index reflects how leveraged and speculative the market is. The STH market cap reflects how much recent capital is still exposed to further selling.
Both being low simultaneously means less leverage to unwind and fewer recent buyers left to capitulate. That is the structural setup that precedes recoveries, not the recovery itself. The April 2025 precedent is the most recent comparable. That setup resolved with a move from $74,000 to $108,000 over the following months. Whether the current setup resolves similarly depends on catalysts that on-chain data cannot predict.
