Core Viewpoint - Copper, a UK digital asset custodian, believes that Bitcoin's prolonged decline is nearing its end, with current market dynamics resembling a "late downtrend behavior," which historically precedes significant reversals [1]. Market Dynamics - The initial phase of the downtrend was heavily influenced by ETF flows, where redemptions consistently drove prices lower. However, this relationship has now weakened [2]. - The 30-day elasticity between ETF flows and Bitcoin returns has decreased to one of the lowest levels this year, indicating that the market has absorbed substantial selling pressure [3]. ETF Influence - Copper has categorized Bitcoin ETF holdings into structural "bands," which indicate price levels where Bitcoin tends to stabilize based on ETF demand. These bands have shown consistent behavior, resembling stair-step price levels that Bitcoin ascends as ETF demand increases [3][4]. - Historically, when ETFs push Bitcoin into a new ownership band, the following 10 days typically see price gains of 10-13%. However, once ETF inflows stabilize within that band, future returns tend to flatten, leading to a more sideways market phase [5]. Current Market Position - Bitcoin is currently trading around $86,000, with ETF holdings concentrated at the upper end of their historical range, typically associated with the $100K–$120K price zone [6]. - The behavior of Bitcoin within these ownership bands is crucial for future outlooks. In the highest band, where Bitcoin currently resides, the average ten-day return has turned slightly negative, marking it as the only band in the dataset with a negative forward return profile [7][8].