Bitcoin Bear Market May Be Over as Profitability Metric Turns Bullish

Profitability signal mirrors early 2023 recovery

Bitcoin (BTC) may have exited its 2026 bear market, according to onchain profitability data. The metric that tracks investor gains and losses turned positive for the first time since October 2025, a pattern that also appeared at the start of Bitcoin’s last bull run in early 2023.

The shift comes from CryptoQuant’s Bull/Bear Market Cycle Indicator, which combines several profitability measures and compares them to their one-year average. When the reading rises above zero, it suggests that Bitcoin investors are, on balance, in profit and that the broader market trend may be turning upward.

Key numbers behind the signal

• The indicator posted a reading of 0.042 as of Aug. 26, the latest full data date.
• This is the first positive reading since early October, ending a ten-month stretch of negative values.
• The cycle low landed on Feb. 5, when BTC fell to $60,000 and the indicator hit -1.244, a level the platform classifies as extreme bear conditions.

What the CryptoQuant CEO said

CryptoQuant CEO Ki Young Ju posted on X on Wednesday that he sees the current downtrend as finished. He cited the Bull/Bear indicator flipping positive and noted that the same type of move preceded the recovery that began in early 2023.

Ki explained that the indicator is built from CryptoQuant’s P&L Index, which uses three onchain metrics: the market value to realized value ratio, net unrealized profit/loss, and spent output profit ratio. Together, these track how much profit or loss Bitcoin holders have realized on-chain and how that compares to past behavior.

Why some traders remain cautious

Not everyone agrees that the macro trend has safely reversed. Bitcoin has shown signs of strength in recent weeks, but questions about market liquidity remain.

Some analysts have warned that demand may still be limited and that several liquidity hurdles sit directly above current spot prices. If buying pressure does not clear those areas, the market could struggle to sustain an up move.

Trader and analyst Rekt Capital described the August monthly close as pivotal for the recovery. The concern centers on whether Bitcoin can break above a downward-sloping resistance line that has been in place since October of last year.

What is confirmed and what is unclear

It is confirmed that CryptoQuant’s Bull/Bear indicator moved from negative territory to a positive reading of 0.042, and that this type of turn followed previous macro recoveries. It is also confirmed that Bitcoin dipped to $60,000 in February during the recent downturn.

What remains unclear is whether this single metric is enough to confirm a lasting bull market, especially given mixed views among traders about liquidity and near-term price structure.

Why this matters for investors

For everyday Bitcoin investors, the signal is useful context rather than a final answer. A profitability metric turning positive can suggest improving market conditions, but it does not guarantee that prices will continue higher. Investors still need to watch whether demand holds and whether price action clears the key technical levels traders are tracking.

What happens next

The next important test appears to be the August monthly close. Whether Bitcoin can hold above key resistance levels and sustain buying pressure will help determine if this signal leads to a broader trend change.

Sources

• Cointelegraph