Historical-level indicators collectively signal that the Bitcoin bear market may come to an end!
author:Blockworks Research
Compiled by Golem
Original title: Five historic indicators light up at the same time, and the Bitcoin bear market bottomed out
Summary of key points:
The current price of Bitcoin is 50% lower than its all-time high, and the bear market has continued for more than 40 weeks. A series of long-term cyclical indicators indicate that the market may be at or close to the low point of the price and time period;
This month, Bitcoin reached the highest level of oversold in history against the NASDAQ index, and the highest level of oversold in history against gold in February of this year. Earlier data close to these extreme levels usually indicates the emergence of long-term cyclical lows, and indicates that Bitcoin will perform well and reap positive returns in the next 1-3 years;
The actual price of Bitcoin (that is, the total on-chain cost of circulating Bitcoin supply) is currently $53,000, which is 18% lower than the spot price. At every bear market low in history, the price of Bitcoin was lower than the actual price, and the price of Bitcoin was lower than the actual price for only 12% of the time in history. From this point in time, Bitcoin has reaped quite impressive returns over a time frame of 1-3 years;
The historical bear cycle usually bottoms out around the 60th week after the historic high, which means that the low of the current bear market cycle may occur at the end of November 2026;
Taken together, the current confluence of factors suggests that the period between now and December 2026 may be a very attractive time to stock up on Bitcoin again in the long term。
Diminishing returns and the need for conditional investment
Since March 2021, the price of Bitcoin has remained stable; since November 2017, the Bitcoin against Nasdaq index has also remained stable over a period of almost nine years. Judging from the current time span, Bitcoin's performance against the stock index is quite stable, yet its volatility is significantly higher than that of the stock index. After risk adjustment, Bitcoin underperformed the stock index.
This background is critical to how to hold Bitcoin. As Bitcoin's price rises and falls, its marginal gains will diminish. The passive strategy of always going long, which has brought benefits to holders in the past few cycles, is now failing, so if you want to get excess profits, you need to seize the opportunity to increase or decrease your Bitcoin holdings in due course.
In order to find these windows of opportunity, the indicators proposed in this article are all condition-based signals. These signals have been “silent” for most of history, and their strongest signals appear at the end, only a few times every ten years.
Currently, these signals have appeared at the same time, and they all point to the same conclusion: Bitcoin may be at or near a long-term price low.
Indicator 1: NASDAQ/Bitcoin Relative Strength Signal
The first signal was built on the Nasdaq 100 index's ratio to Bitcoin, which is calculated based on weekly closing prices over the past 875 cycles. We calculated the 14-period Relative Strength Index (RSI) of this ratio and smoothed it using a 14-period simple moving average.
A higher RSI indicates that the Nasdaq index is overbought relative to Bitcoin; a lower RSI indicates the opposite. This indicator is not an intraday trading technical indicator. It is a 14-week moving average of a 14-week oscillator. The transition period between overbought and oversold states is a multi-year market cycle rather than days or weeks.
NASDAQ/BTC RSI
Relatively overbuying the NASDAQ is a rare event. The RSI moving average is above 65 only 5.78% of the time in its historical data, and only 0.35% of the time above 70. These thresholds were only breached in four periods: February 2015, February 2019, August 2022, and the period that began in late January 2026 and continues to this day.
The current values need to be analyzed from three aspects:
First, the current level of 72.6 is at an all-time high, 4.1 points higher than the previous high of 68.5 set in September 2022, and all observations above 70 have occurred in the past month;
Second, the current cycle has lasted 24 weeks, setting the longest record in history, far exceeding 11 weeks in 2015, 4 weeks in 2019, and 10 weeks in 2022;
Third, it has only occurred four times in the past 16 years, and the current situation is one of the rarest phenomena in this indicator.Measured by this, this is the worst overbought NASDAQ index in history against Bitcoin. In other words, since the pair and its RSI can be shown in reverse, judging from a long time frame, this is the worst oversold Bitcoin against NASDAQ in history.
Indicator 2: Expected long-term returns
Each time the NASDAQ/Bitcoin RSI index is above 66, the expected earnings curves for BTC/USD and BTC/NAS100 have shown asymmetrical upward trends over the three cycles that have occurred, but only over a longer period of time.
Comparison of expected earnings curves for BTC/USD and BTC/NAS100
NASDAQ/BTC RSI Expected Earnings
This table has two important characteristics:
The first is the time span. Expected short-term earnings have little reference value, as 30-120 days of earnings are smaller and in different directions; for example, Bitcoin holdings in 2022 fell 29.1% in 120 days, but rebounded 397% after three years. Relative strength signals are of little significance in indicating trends over the next one to three years.
The second is a decline in earnings margins. The three-year Bitcoin yield per cycle is about one-quarter to one-third of the previous cycle, which is in line with the declining marginal return pattern discussed above. In all observations, Bitcoin outperformed the NASDAQ index by a large margin over the next three years.
Indicator 3: Gold/Bitcoin Relative Strength Signal
If the Nasdaq index represents Bitcoin's status as a risky asset, then gold represents its position as a means of storing monetary value.
Constructing a similar indicator on the gold/bitcoin ratio, we observed similar data. Data above 66 is rare, has mean regression characteristics, and is concentrated near extreme values. According to this indicator, February 2026 was the most overbought period in gold/bitcoin history.
Gold/Bitcoin RSI
The pair's higher RSI readings coincided with Bitcoin's long-term cyclical price lows, proving a typical characteristic. The indicator's expected return curve is similar to the results of studying NASDAQ above. In the 1-3 year time frame, judging from such extreme RSI data, Bitcoin's historical performance was superior to gold and the US dollar.
Comparison of expected earnings curves for BTC/USD and XAU/BTC
Indicator 4: Bitcoin's actual price (on-chain cost basis)
The actual price of Bitcoin is estimated on the basis of the total on-chain cost of all bitcoins in circulation. Unlike the spot price, which reflects Bitcoin's current market value, the actual price measures the average price of the last time the existing supply was transferred on-chain, thereby estimating the on-chain cost. Judging from historical data, the actual price represents the deep value of Bitcoin.
The actual price of Bitcoin on the chain
The actual price is a reference standard, not a bottom line. Currently, the actual price of Bitcoin is $53,000, which is 18% lower than the spot price, and only 12% of the time in the history of Bitcoin's spot price has been lower than the actual price.
Similar to the RSI indicator mentioned above, this situation is an end-of-cycle signal. Every bear low in Bitcoin's spot price history has been lower than the actual price, and after entering this region historically, the price usually falls further before bottoming out. As a result, a drop to or below $53,000 is in line with, rather than against, the law of history.
Since entering the region, the expected benefits have been considerable in the long run.
Bitcoin's price trend after the spot price falls below the actual price
From the first weekly close of each cycle that was lower than the actual price, historical data shows that the price showed significant positive gains over the next 150 weeks. The magnitude of these numbers declined cyclically, in line with the declining trend of the RSI indicator, but in the same direction.
Historically, Bitcoin's first closing price below the actual price marked the end of a bear market rather than the beginning or middle of a bear market. Despite this, the multiple of Bitcoin's spot price and actual price has fallen sharply from its previous high of 2025, indicating a reduction in market risk.
Indicator 5: Cyclic Clock
The last indicator is the most succinct. It shows the historical structure of the Bitcoin bear market and is measured by price and time.
Bitcoin bear market duration
In the 2013, 2017, and 2021 cycles, the Bitcoin price low usually occurred in the 60th week after the all-time high. The current cycle is in week 40, and the retracement is 50%, which is basically in line with the trend of the previous three cycles. If the 60th week pattern holds, Bitcoin's low will form at the end of November 2026.
Although the NASDAQ/Bitcoin and Gold/Bitcoin RSI indices have shown extreme values, the retracement of this cycle is still in line with the historical retracement path.
The time dimension has also compressed the interval between cycles, with each cycle falling back to a new historical high in less and less time.In other words, it takes less time to get back to the previous high point than the previous cycle. Assuming this trend continues, the new all-time high should occur within 120 weeks of the previous high, which means a new high will occur before February 2028.
These two observations themselves do not contain any mechanisms; they are just empirical rules over a few cycles. They act as time anchors, superimposed on top of the condition-based signals described above, and limit Bitcoin's remaining room for decline.If the historical structure holds up, then Bitcoin is still around 20 weeks away from its low point, and may even have bottomed out.
The future trend of Bitcoin price
Given the current situation, the following scenario combination combines the background and historical results described above to depict a series of paths Bitcoin may take in the next three years. This is not a prediction or assertion of possible outcomes, but rather an answer to the question: where would prices go if the current situation were solved the same way similar situations were solved in the past?
Assuming that marginal gains from the rise and fall decrease, the actual price is still discounted, and referring to the historical retracement path in price and time, we constructed the possibility of Bitcoin's price trend under these conditions. Each possibility is taken from Bitcoin's three-year trend after a certain signal appeared, and scaled with varying intensity from 0.33 to 0.80 based on cyclical yield compression. The range in the chart marks the boundary where the historical distribution has decreased in strength, not the boundary where the market may fluctuate.
The shaded band shows the range of these possibilities.
Bitcoin's future price trend forecast
These shaded bands are scaled-down recreations of the historical path after the indicator signal was issued. All of these possible outcomes are satisfactory; they describe possible scenarios where history repeats, not all possible outcomes, and do not include the results of signal failure.
While earnings are expected to vary by the end of 2026, the distribution of earnings will clearly shift to a positive and asymmetrical upward trend by 2027 and 2028.Given the current market environment and forecast path, the next few quarters could present an extremely attractive opportunity to invest in Bitcoin for the long term.
Bitcoin price forecast for the next 3 years
Risks and limitations
Each indicator should be assessed and weighed according to its own value. These indicators should not be interpreted as a mechanism and causal relationship between Bitcoin's cyclical lows, but rather as a reflection of the long-term cyclical lows observed in history and having corresponding characteristics.
Furthermore, the indicators listed are not all indicators that can be used to approximate long-term cyclical price lows. These analyses are based on a small sample size; the RSI moving average shows a valid sample of four independent periods, one of which has yet to be determined; the actual price study is based on the four periods; while the cyclic symmetry analysis is based on the first three completed cycles. With such a large sample size, the distribution of expected historical returns can describe historical trends, but a cycle of divergence will also significantly weaken all presented relationships.
Furthermore, the signals presented should not be regarded as independent supporting evidence. The RSI indicator, its proximity to the actual price, and the position of the cycle clock are largely a measure of the same fact: Bitcoin has retracted sharply from its high point and continued to decline. In any deep, continuous retracement, each indicator should go to the extreme, so they appear more like the same observation measured in multiple ways at the same time rather than multiple independent and unique observations.
Structural changes may cause this cycle to eventually diverge. The current cycle is the first to use ETF holdings, large corporate holdings, and more complex derivatives trading such as options and perpetual futures. The four-year cycle framework may eventually prove to be just a description of the four observations rather than an ongoing characteristic of the asset.
Finally, the RSI indicator signals are relative. Bitcoin outperforms Nasdaq or gold, which could either mean that both assets are rising or falling at different rates. Even if the RSI signal is beneficial to Bitcoin, the nominal price of Bitcoin may be lowered if the stock market or gold price falls back from the current high. The signals presented here have little predictive effect on trends prior to November; they only reflect the asymmetry of price trends over the next 1-3 years.
conclusions
However, if we consider the above indicators, we have come to the conclusion that Bitcoin may be at or near a cyclical low, which may be formed before the end of the year, and the upward trend will resume thereafter.
Each signal appeared near its historically rare extreme value, and every previous signal predicted that Bitcoin would reap significant gains and outperform stocks in the next few years. If the low hasn't happened yet, then the period between now and the low is likely to be a very attractive range for long-term reaccumulation of Bitcoin. These signals have been silent for most of history, but now they have given a “green light.”
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