A closely watched on-chain indicator is flashing an early bullish signal for bitcoin, but analysts caution that the shift should not be taken as a definitive forecast.
CryptoQuant’s bitcoin bull-bear cycle indicator has turned green for the first time since 2023, suggesting that market conditions may be stabilizing. According to on-chain analyst Julio Moreno, the move points to a potential recovery in underlying market structure.
“Historically, this signal has marked important regime shifts,” Moreno said, noting that when the indicator exits bear territory and enters an early bull phase, it often indicates that the worst of a correction has already passed.
However, not all analysts view the signal as predictive. Mati Greenspan, founder of Quantum Economics and former eToro analyst, emphasized that the indicator is better understood as a regime-change tool rather than a forward-looking crystal ball. Its primary value, he said, lies in identifying when bitcoin stops behaving like a typical bear-market asset.
Greenspan added that confirmation must come from sustained improvements in demand, liquidity, and price strength. “At this stage, price action needs to validate the signal,” he said.
Historically, similar signals in 2019 and early 2023 preceded strong bullish trends following prolonged downturns. Still, Moreno highlighted March 2022 as a key exception, when the indicator briefly turned positive before the market moved into a deeper decline.
The current setup, he noted, makes May 2026 particularly significant. While the indicator suggests a constructive shift, bitcoin is still in a transitional phase. Momentum is improving, as reflected in a rising 30-day moving average, but price behavior has yet to fully align.
Bitcoin is currently struggling to break above the $82,000 resistance level, despite rebounding roughly 35% from its February lows near $60,000. This ongoing battle between improving on-chain metrics and stubborn resistance mirrors conditions seen during previous uncertain phases.
Moreno also pointed to signs of “exhaustion” in secondary indicators, suggesting that further confirmation is needed before a sustained rally can take hold. Unlike earlier cycle transitions, the current environment is complicated by a neutral Fear & Greed index and broader macroeconomic uncertainty.
Other market participants share the view that the cycle may be turning. Arthur Hayes, CIO of Maelstrom and co-founder of BitMEX, said he believes bitcoin has already established a bottom around $60,000. While not referencing the CryptoQuant indicator directly, Hayes pointed to $90,000 as a key level that could trigger a more explosive rally toward previous highs near $126,000.
Still, some caution that on-chain metrics are often misinterpreted. Jason Fernandes, co-founder of AdLunam, noted that indicators such as MVRV and NUPL are not designed as precise trading signals. Instead, he said, they should be viewed as tools for understanding broader investor behavior and where bitcoin sits within the wider liquidity cycle.
