The BTC Seller Exhaustion Index is emerging as one of the key on-chain metrics for observing this Bitcoin bear-to-bull transition. On August 11,2026, the original author Murphy observed that the BTC Seller Exhaustion Index entered the "Extreme Exhaustion Zone" of this cycle for the first time, with BTC trading at around $63,000 that day. By the update on August 28, the metric had exited the extreme zone, so the original author designated the first signal as "Signal 1 Concluded".
The real question worth paying attention to is not "whether $63,000 is the lowest point", but: If Signal 2 appears again in the future, will the BTC price at that time be lower, or will it instead be higher than that of Signal 1?
This is also where this type of on-chain metric is most easily misunderstood. Seller exhaustion helps investors observe whether the market supply side is losing momentum for further sell-offs, but it cannot accurately predict the lowest price, nor can it guarantee that the next signal will definitely provide a cheaper entry position.
What is the BTC Seller Exhaustion Index?
The metric discussed in the text corresponds to Glassnode's Seller Exhaustion Constant.
According to Glassnode's official definition, this indicator combines the percentage of supply in profit and the 30-day price volatility, and is primarily used to identify market phases where "low volatility coincides with a relatively high proportion of assets in a loss state. " Glassnode believes that such conditions may correspond to periods of reduced market risk, dwindling selling pressure, and the potential formation of a market bottom. This indicator was first proposed by ARK Invest.
In short:
After BTC has experienced a prolonged decline, a large number of investors are already in a loss-making position; at the same time, if price volatility begins to narrow significantly, it often means that fewer people are willing to continue selling at low levels.
This is the core logic of "seller exhaustion".
However, it is necessary to specifically distinguish between two concepts:
Seller exhaustion does not equal that buyers have entered the market on a large scale.
A reduction in selling pressure can halt the market's rapid decline, but for prices to truly enter a sustained upward phase, it usually requires the combined support of new buying interest, capital inflows, and improved market risk appetite.
This was also reflected in Glassnode's own analysis in mid-August. According to public reports, Glassnode still stated on August 11 that the historical bottom characteristics corresponding to the Seller Exhaustion Constant had not been fully confirmed and that further observation was needed to see if selling pressure would subside further.
Therefore, the BTC Seller Exhaustion Index is more suitable as an observation tool for "whether a bottoming environment is forming" rather than a precise bottom-fishing indicator.
Does the end of Signal 1 mean that BTC has hit its bottom?
Not necessarily.
According to the original author's classification, on August 11,2026, when BTC was trading at around $63,000, the Seller Exhaustion Index entered the "Extreme Exhaustion Zone", forming Signal 1. The indicator subsequently moved out of this range, marking the end of the first signal.
Historical experience shows that the first entry into the extreme zone often indicates that the market has entered a relatively deep stress phase, but it does not necessarily mean that prices have hit the cyclical low.
This is because on-chain metrics describe the state of investor behavior rather than a fixed price.
If BTC falls all the way from $126,000 to $63,000, a large number of holders are in loss, market volatility declines, and sellers gradually lose the motivation to keep selling, this could trigger a depletion signal.
However, new macro risks, ETF outflows, leverage liquidations, or sudden policy events could still emerge at this time, pushing BTC down again.
So what is truly worth observing is:
After the appearance of Signal 1, does BTC begin to establish a new supply-demand balance?
If prices stop making new lows rapidly, selling pressure continues to ease, and trading volume and capital flows start to improve, the bottoming narrative will gain more confirmation.
Conversely, if significant selling pressure re-emerges in the market, a single seller exhaustion signal will not be sufficient to confirm that the entire bear market has ended.
Why might Signal 2 be priced higher than Signal 1?
This is the most noteworthy part of the original text.
Many investors naturally tend to assume that:
The first signal costs $63,000 → the second signal should be cheaper.
In reality, however, this is not necessarily the case.
Suppose BTC rises from $63,000 to $100,000, and then pulls back from $100,000 to $80,000.
With this correction reaching 20%, it could very well trigger noticeable shifts in volatility, earnings delivery, and market sentiment, and recreate an environment of seller exhaustion.
Then even if Signal 2 appears again, the BTC price may already be $80,000, which is significantly higher than the first occurrence's $63,000.
This is also the reason why the original author emphasized that "Signal 2 may have higher certainty, but it may also come with a higher price. "(Zamantika)
From a trading logic perspective, this is essentially a trade-off between price and certainty of confirmation.
The closer we get to the market bottom, the higher the uncertainty usually is. By the time more and more signals confirm the trend, investors have gained more certainty, but the market has often already risen for some distance.
Therefore, there is nothing wrong with waiting for Signal 2.
The real pitfall to avoid is interpreting "waiting for confirmation" as "having to wait for a price lower than $63,000".
The market will not necessarily offer the same price again just because an investor missed the first opportunity.
KTX Crypto Watch: What to Look for in the Next Pullback?
For KTX Crypto, this community perspective is better viewed as a market supply-side observation signal rather than a direct buy order.
First, we need to observe the next BTC pullback, whether the seller exhaustion index re-enters the low area .
If BTC experiences a significant pullback but the indicators show a notable reduction in market selling pressure again, the reference value of Signal 2 will increase.
Second, it is necessary to observe the price of BTC itself.
Assuming that when Signal 2 appears in the future, BTC is still above $63,000, this does not mean the indicator is invalid. On the contrary, it may indicate that the market has established a higher cost base and supply-demand equilibrium zone.
Third, it is necessary to include buyer-side metrics.
According to an analysis from Glassnode, "sellers are showing signs of exhaustion, while buyers remain insufficient. " In other words, a reduction in selling pressure alone is not enough to sustain a continuous bull market.
Therefore, it is possible to observe simultaneously:
Seller exhaustion → trading volume → ETF capital flow → stablecoin liquidity → cost basis of long-term and short-term holders → BTC price structure.
If multiple indicators improve simultaneously, the credibility of the signal is usually higher than that obtained by observing only the curve on a single chain.
Users can continuously monitor BTC prices and market changes through the KTX Market Dashboard.
If you wish to further participate in the crypto market, you can create a KTX account to explore spot trading and other trading products. When using leveraged products such as perpetual contracts, you need to pay extra attention to margin requirements, funding rates, and liquidation risks.
FAQ
What is the BTC Seller Exhaustion Index?
The BTC Seller Exhaustion Index is mainly used to observe whether sellers are gradually losing the motivation to continue selling in a market environment of higher losses and lower volatility. Glassnode's Seller Exhaustion Constant is calculated by combining the proportion of profitable supply and the 30-day price volatility.
Does the emergence of the BTC Seller Exhaustion Index signal that the market has bottomed out?
No. It primarily indicates that the market is entering a potential bottom zone or an environment of declining selling pressure, and confirmation from price, trading volume, capital flows, and other on-chain metrics is still required.
Why does Signal 1 appear near the $63,000 level?
According to the original author's observations, when BTC was trading around $63,000 on August 11,2026, this indicator entered the "Extreme Exhaustion Zone" of the current bear market for the first time, which is why this level is marked as Signal 1.
Is Signal 2 always lower in price than Signal 1?
Not necessarily. If BTC rises sharply first and then pulls back again, even if seller exhaustion is triggered for the second time, the price may still be higher than that of the first signal.
Why might Signal 2 be more valuable as a reference than Signal 1?
Because the second signal may provide more confirmation of market behavior, but "higher confirmation" does not mean "lower price". Waiting for more confirmation often comes at the cost of a higher entry price.
Can the BTC Seller Exhaustion Index be used alone as a buy signal?
This is not recommended. On-chain indicators are subject to model assumptions and historical limitations, so comprehensive judgments should be made in combination with trading volume, ETF capital flows, cost basis, macroeconomic environment, and market leverage.
Conclusion
The BTC Seller Exhaustion Index offers a valuable perspective: instead of constantly guessing where the BTC bottom is, it is more useful to observe how many market participants are still willing to sell at a loss.
Signal 1 on August 11,2026, indicated that selling pressure had reached an extreme exhaustion phase, but this alone does not prove that $63,000 is the absolute low of this cycle.
What matters next is whether Signal 2 appears, as well as the price of BTC and the market environment when it occurs.
If the second signal appears at a higher price, it does not mean that the opportunity has disappeared. Instead, it may indicate that the market has gradually shifted from the "bottom-finding" phase to the "new trend establishment" phase.
Therefore, the BTC Seller Exhaustion Index is more suitable as a dynamic market structure indicator rather than a fixed bottom-fishing trigger. Investors still need to make comprehensive judgments by combining capital flows, price trends, macro factors and their own risk tolerance.
Included in the original text
On August 11,2026, the BTC Seller Exhaustion Index entered the "Extreme Exhaustion Zone"(red zone) for the first time. On the same day, $BTC was trading at $63,000.. ... .
As an indicator that monitors the market supply side based on "volatility and high losses", it has performed exceptionally well in the past three bear market cycles.
Now, it has left the limit zone, meaning Signal 1 has ended.
That tweet had a total of 133 comments. I was thrilled to see some of you saying you've already boarded the train! You chose to trust my judgment and also trust BTC.
On behalf of BTC, I want to say "thank you"; Bitcoin will never let down anyone who trusts in it!
Some of you might say you'll wait for Signal 2 to appear before entering the position. I bet right now, you must be feeling extremely frustrated.
Because that was almost the last clear opportunity before this round of rally started.
Will there be a Signal 2? . ... .. I think there will!
It is not that I believe in the existence of 1 and 2 simply because they have appeared throughout history. Rather, the ebb and flow of tides is itself a law of nature; what has risen now will inevitably fall again next time.
But the problem is: we don't know where the price of BTC will start (falling) and where it will end the next time Signal 2 appears?
When the price drops from 80,000 to 60,000, the indicators will fall; when it drops from 100,000 to 80,000, the indicators will also fall. If it's the latter case, would you still dare to buy even when a signal appears?
I once summarized: Throughout history, Signal 2 has always been more certain than Signal 1. However, the risk is that the price of Signal 2 may also be higher than that of Signal 1 (see citation).
Now, this practical issue is right in front of us.
So, personally, I think from now on, you should forget that BTC recently hit the $60,000 or $50,000 range, and instead keep in mind that BTC once reached $126,000.
Any short-term fluctuations at present are negligible in the face of this figure.
What you are missing right now is only a small segment of the transition period between bear and bull markets, not an entire bull market!
But if you keep dwelling on the regret of "why didn't I go all-in when the price was at 50,000 or 60,000", then you will still miss the next opportunity, and the one after that.
Then you'd really miss out on an entire cycle. ..
Original Author: Murphy
X Account: @Murphychen888
Published: August 28,2026
Original Link: https://x.com/Murphychen888/status/2093222047556264423?
Overall, the BTC Seller Exhaustion Index helps gauge selling pressure and potential bottoming conditions, but neither Signal 1 nor Signal 2 represents a definitive market bottom. Assessing the next phase of market movement still requires combining price action, trading volume, ETF capital flows, macroeconomic conditions, and other on-chain metrics.
Risk Warning: The cryptocurrency market is highly volatile. This article is for informational and educational purposes only and does not constitute any financial or investment advice.
