BIT Research: Is the Bitcoin Bear Market Over? Five On-Chain Metrics Turn Bullish in Unison, Releasing 67% Bullish Signal

Bitcoin on-chain data is signaling a new bull market. The latest Market Regime Model[1] has maintained a 67% net long allocation[2] for the second consecutive month—an important shift after roughly ten months in cash, when the model turned bullish again on September 1, 2026. At the same time, five on-chain indicators—Short-Term Holder Realized Price[3], True Market Mean[4], MVRV[5], Net Unrealized Profit/Loss (NUPL)[6], and Value Days Destroyed (VDD)[7]—have all entered bull market territory, forming a synchronized bullish setup for the first time since October 2025.

This shift also echoes the previous cycle. On October 1, 2025, the model still maintained a 100% net long allocation, but it was cut to 33% in November, further reduced to zero in December, and remained on the sidelines throughout most of the subsequent drawdown[8]. A similar situation occurred in the prior cycle: the model downgraded its signal in late 2021 and did not upgrade it again until April 2023. Now, with multiple on-chain indicators improving in tandem, the Market Regime Model has once again issued a bullish signal.

Five On-Chain Indicators Turn Bullish Together: Bitcoin Reclaims Key Cost Levels

Short-Term Holder Realized Price is a key indicator for gauging Bitcoin's market regime. In October 2025, Bitcoin fell below the then-short-term holder realized price of roughly $112,300, meaning short-term holders as a whole slipped into losses, and market momentum and sentiment weakened accordingly. In August this year, Bitcoin reclaimed this metric at around $68,000, a major signal of the market turning bullish.

Currently, the Short-Term Holder Realized Price stands at $74,319, while Bitcoin trades at $83,345—about 12% higher. As long as Bitcoin remains above this level and the Short-Term Holder Realized Price continues to trend upward, the market as a whole is likely to sustain its bullish setup.

At the same time, Bitcoin has also reclaimed the True Market Mean. This metric currently sits at $77,460, with Bitcoin trading about 7.6% above it. Compared with the Short-Term Holder Realized Price, the True Market Mean moves more slowly. Historically, when Bitcoin has been able to hold above this level consistently, the probability of a sustained bull market has been high—and the longer it stays above it, the more likely the rally is to take hold.

The third indicator, MVRV, has likewise entered bull market territory, currently reading 0.20. During the 2023–2025 bull market, this metric rarely rose above 0.3, so the current reading is already relatively strong. MVRV remaining positive further reinforces the on-chain signal of Bitcoin shifting from bear to bull.

NUPL and VDD Strengthen in Tandem: What Does a 67% Net Long Allocation Signal?

In addition to the three indicators above, Net Unrealized Profit/Loss (NUPL) has also turned positive, returning to bull market territory for the first time since October 2025. This means the overall profitability of Bitcoin investors is improving, and profits typically encourage higher leverage[9] and increased buying pressure; conversely, losses can gradually trigger stop-loss[10] selling, declining market interest, and shrinking trading volume.

Meanwhile, Value Days Destroyed (VDD) has also turned bullish again, albeit starting relatively slowly. Unlike the Short-Term Holder Realized Price, VDD reflects the holding behavior of long-term investors, so it moves more gradually and is less sensitive to short-term pullbacks within a bull market. Five on-chain indicators entering bull market territory simultaneously further reinforces the overall bullish signal.

This also explains why the Market Regime Model ended its roughly ten-month cash position on September 1, 2026, and has maintained a 67% net long allocation for the second consecutive month. However, the model has not yet returned to a fully invested 100% state, because not all indicators have turned bullish, and some are only slightly above the bullish threshold.

Next, the Short-Term Holder Realized Price of $74,319 and the True Market Mean of $77,460 will be the two key levels for judging whether the uptrend can continue. A brief dip below either line does not necessarily change the market regime; but a sustained break below both could be the first signal that the market recovery is losing momentum.

Summary

Overall, Bitcoin's on-chain market regime has shifted markedly. For the first time since October 2025, five on-chain indicators have entered bull market territory in sync, and the Market Regime Model has resumed a 67% net long allocation after a prolonged period on the sidelines. Considering historical cycle behavior, the on-chain data supports the judgment that a new market cycle began on September 1, 2026.

However, the model has not yet reached a fully bullish level, and the market recovery still needs continued confirmation from key on-chain indicators. Whether Bitcoin can hold the two important price levels of $74,319 and $77,460 going forward, and whether the Short-Term Holder Realized Price can continue its upward trend, will be important bases for judging whether this bull market can persist.

Glossary

1. Market Regime Model: A model that uses a set of indicators to classify the market into different regimes such as bull and bear markets, and adjusts positions accordingly.

2. Net Long Allocation: The proportion of long positions, net of short positions, relative to a full position. 67% means holding two-thirds of a full position; zero means staying in cash on the sidelines.

3. Short-Term Holder Realized Price: The average price at which Bitcoin held by short-term holders (typically investors who bought within the past 155 days) last moved on-chain, which can be viewed as the average cost basis of recent buyers. When Bitcoin's price is above this level, these investors as a group are in profit.

4. True Market Mean: A metric measuring the average cost basis of active investors. It excludes Bitcoin held by miners and coins that have not moved for years, so it moves more slowly than the Short-Term Holder Realized Price.

5. MVRV (Market Value to Realized Value): Compares Bitcoin's market capitalization with its realized capitalization, i.e., the total value of all Bitcoin calculated at the price of its last on-chain transfer. A higher reading means greater average unrealized profit for holders.

6. Net Unrealized Profit/Loss (NUPL): The proportion of unrealized profit or loss in Bitcoin's market capitalization. A positive reading means investors are profitable overall; a negative reading means they are at an overall loss.

7. Value Days Destroyed (VDD): Tracks the spending of long-held Bitcoin, weighting each coin by how long it was held and its value at the time of transfer. A high reading indicates that long-term holders are selling into strength.

8. Drawdown: The extent of a price decline from a previous high, usually expressed as a percentage.

9. Leverage: Borrowing funds to establish positions larger than one's own capital, which magnifies both gains and losses.

10. Stop-Loss: An order that automatically closes a position when the price reaches a preset level, in order to limit losses.

Some of the views above are from BIT on Target. Contact us to obtain the full BIT on Target report.

Disclaimer

Markets carry risk; invest with caution. This article does not constitute investment advice. Digital asset trading may involve extreme risk and volatility. Investment decisions should be made after carefully considering individual circumstances and consulting a financial professional. BIT is not responsible for any investment decisions based on the information provided in this content.