The crypto market experienced a significant drop on Tuesday, leading to a nearly $1 trillion decrease in the total crypto market capitalization since its peak in December 2024. However, various on-chain metrics indicate that Tuesday's sell-off may have marked a local bottom for Bitcoin. The Crypto Asset Sentiment Index, which reached its lowest level since August, has flashed a contrarian buy signal for Bitcoin, suggesting limited downside risks and a favorable risk-reward outlook. Glassnode data shows that investors lost $1.8 billion, the largest single-day loss since August, and short-term holders sent a significant amount of BTC to exchanges at a loss. These indicators are essential in identifying potential market bottoms and suggest that Bitcoin may be nearing a key turning point.



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