Analyst: Market Digesting Fear, On-Chain Metrics Show Bitcoin Has Bottomed Structure Expectation

June 6th — On-chain analyst Murphy shared in a post that Bitcoin (BTC) dipped below the $60,000 threshold yesterday, though the market’s losses aren’t aligning with sentiment indicators. Currently, the 3-day moving average of adjusted on-chain realized loss (EARL) stands at $1.13 billion, nearly half of its value on February 5. While he stops short of ruling out further downside for BTC, the fact that EARL isn’t rising even at lower price levels is a classic signal of “bottoming expectations.” To clarify: EARL reflects the broader market’s level of fear, while STH-RUL (Short-Term Holder Relative Unrealized Loss) measures the psychological pressure facing new investors. During the early stages of a bear market downtrend, short-term holders typically face extreme psychological strain, pushing STH-RUL above +5 standard deviations — a level that often correlates with a systemic crisis. Later, even if prices continue falling, STH-RUL rarely hits its prior peak; this is because chips have already turned over at high loss ranges, new buyers have lower cost bases, and market pressure is being absorbed. Murphy notes that both EARL and STH-RUL are sending consistent signals right now: market panic is being digested, not spreading. It’s important to point out that price hitting new lows while loss indicators don’t isn’t a guarantee of a bottom, but this pattern has almost always defined true bottoms in historical cycles. Bottoming is a process of repeated pressure and absorption until chips complete turnover amid panic, new buyers enter with low enough costs, and the price finally loses the momentum to keep dropping.