Bitcoin on-chain indicators are improving. Are we about to emerge from the bear market?
- Core Insight: CryptoQuant's Bull-Bear Market Cycle Indicator and Bull Score Index have recently both turned positive simultaneously, signaling positive recovery signals in Bitcoin on-chain data. However, similar signals in 2022 briefly turned positive before continuing to decline sharply, so the market must be wary of a potential "false reversal" risk.
- Key Elements:
- CryptoQuant's Bull-Bear Market Cycle Indicator has turned positive for the first time since October 2025. Bitcoin's price has rebounded over 35% from its February low of approximately $60,000 to $81,000.
- Another core indicator, the Bull Score Index, rose into the neutral zone of 50 in late April for the first time since the downturn. However, in March 2022, this indicator reached 50 only to sustain that level for just a week before continuing its deep decline.
- The bottom recovery process for this bear market cycle has taken about 3 months, faster than the 12 months seen in 2022. However, the roughly 55% decline from peak to trough makes the sustainability of this recovery debatable.
- Compared to 2022, this cycle has structural differences: spot Bitcoin ETFs serve as an anchor for institutional demand, with net inflows of $2.44 billion in April; the number of whale addresses increased by 142; and the RHODL ratio is at its third-highest historical level.
- A Stonex research director pointed out that, based on halving cycle projections, a durable bottom for this cycle may not appear until the fourth quarter of 2026, with a decline of about 60% corresponding to a price of approximately $50,000.
Original Author: Claude, TechFlow
TechFlow Editor's Note: CryptoQuant's Bull-Bear Market Cycle Indicator has turned positive for the first time since October 2025. Meanwhile, another core indicator, the Bull Score Index, rose to a neutral level of 50 in late April. Bitcoin has posted gains for three consecutive months, rebounding from a February low of around $60,000 to above $81,000. However, the precedent of 2022 serves as a warning: a similar signal failed just one week later, and prices subsequently continued to plunge.
Bitcoin's on-chain data is sending a long-awaited positive signal.
According to data from CryptoQuant, its Bull-Bear Market Cycle Indicator has recently flipped back into positive territory, marking the first time since October 2025 when the P&L Index fell below its 365-day moving average.
This indicator determines whether Bitcoin is in a bull or bear cycle by measuring the distance between the P&L Index and its 365-day moving average. The P&L Index itself integrates three core on-chain metrics – the MVRV ratio, NUPL, and the SOPR of long-term and short-term holders – serving as CryptoQuant's unified valuation tool for assessing whether Bitcoin is overvalued or undervalued.
As of press time, Bitcoin is trading at approximately $81,000, a rebound of over 35% from its cyclical low of around $60,000 in early February.
Source: CryptoQuant, original post by analyst MorenoDV_
From Deep Bear to First Positive Signal: On-Chain Recovery Took 7 Months
Looking back at the on-chain trajectory of this bear market: After Bitcoin's sharp decline from its all-time high of $126,000 in October 2025, the Bull-Bear Cycle Indicator quickly fell into negative territory. According to a Cryptonomist report from February this year, the indicator dropped to approximately -1.2 in early February, comparable to the lows seen during the March 2020 COVID crash. Concurrent reporting from CryptBull confirmed that the indicator's reading had reached its lowest level since the bottom of the 2022 FTX collapse.
The recovery from the deep bear market bottom in February to the recent positive flip took about three months. This pace is faster than the 2022 cycle (where the indicator remained in negative territory for roughly 12 months), but considering the ~55% decline in this cycle from peak to trough (from $126,000 to under $60,000), the sustainability of this recovery remains debatable.
Bull Score Index Concurrently Rises to Neutral, Multiple Indicators Converge
The Bull-Bear Cycle Indicator turning positive is not an isolated event.
According to a CoinDesk report from April 23, another key CryptoQuant metric, the Bull Score Index, simultaneously rose to a neutral reading of 50, the first time the index has done so since Bitcoin began its decline from the $126,000 peak.
The Bull Score Index aggregates ten on-chain indicators, covering dimensions such as blockchain activity, investor profitability, and liquidity. Readings below 40 typically indicate a structural bear market, while readings above 60 point to a strong, sustainable uptrend.
CryptoQuant's Head of Research, Julio Moreno, commented that this is the first time during this bear market that the Bull Score Index has entered neutral territory. However, he also cited the precedent from March 2022: the index briefly rose to 50 at that time but maintained the level for only about a week, after which prices continued to fall sharply.
The improvement at the price level is also clear. Bitcoin posted gains of roughly 2% and 12% in March and April, respectively, and has gained about 6% in May so far, marking three consecutive months of positive returns.
The Lesson of the 2022 'False Signal': History May Not Repeat, But the Market Remembers
The biggest concern in the market regarding the current positive signals stems from the historical lesson of 2022.
In March of that year, the Bull Score Index briefly rose to a neutral level of 50, after which Bitcoin fell from approximately $47,000 all the way down to $16,000. The Bull-Bear Cycle Indicator also briefly turned positive in 2022, but ultimately continued its deep decline amid the successive shocks from the Luna/UST and FTX collapses.
However, there are structural differences between this cycle and 2022. Since its launch in January 2024, the spot Bitcoin ETF has become a significant anchor for institutional demand. According to SpotedCrypto, spot Bitcoin ETFs saw net inflows of $2.44 billion in April, the strongest month since October 2025. Glassnode data shows that the number of whale addresses holding over 1,000 BTC has increased by 142 over the past six months. Furthermore, Glassnode's RHODL ratio currently stands at 4.5, the third-highest reading in Bitcoin's history; the two previous similar high levels occurred at the cycle bottoms of 2015 and 2022, both of which were followed by sustained bull markets.
StoneX's Global Head of Research, Matt Weller, offers a more cautious reference framework in his Q2 outlook.
Projecting based on the four-year Bitcoin halving cycle, the definitive bottom of this cycle may not emerge until around Q4 2026. If historical patterns hold, the decline from peak to trough would be roughly 60%, corresponding to a price of around $50,000.
For traders, the real meaning of the current signals might be this:
The most fearful phase may have passed, but declaring the start of a new bull market is still premature. Bitcoin needs to break through and hold above the 200-day moving average resistance around $82,000 before the technical picture can offer a more convincing confirmation of a trend reversal.
