CryptoQuant: Trend Reversal Signal After 8 Months... Is the Bear Market Over?

[Block Media Reporter Lee Jeong-hwa] The on-chain indicators showing the medium to long-term market flow of Bitcoin (BTC) have returned to the bullish territory after 8 months. With both spot and futures demand increasing simultaneously and overall bullish indicators in the market improving, the possibility of exiting the bear market has grown. However, it has been pointed out that significant increases in unrealized profits for investors and profit-taking by whale investors indicate that further price increases are needed to confirm a full trend reversal.

According to CryptoQuant, a blockchain data analysis company, Bitcoin's 'Cycle Momentum Indicator' has recently transitioned from the bearish territory it has been in for the past 8 months to positive. This indicator is used to assess the medium to long-term bullish and bearish phases of the Bitcoin market.

CryptoQuant evaluated this positive transition as an early signal indicating the potential end of the bearish trend. However, to confirm a trend reversal, it explained that the indicator needs to rise to the 20-30 level over the next few weeks and that the price recovery trend must continue.

Positive Transition After 8 Months... Signals Similar to Past Recovery Periods

The Cycle Momentum measures the difference between CryptoQuant's Profit and Loss Index (P&L Index) and the 365-day moving average. If the indicator is above 0, it is interpreted as a bullish phase, while if it falls below 0 and the profit and loss index is below the 365-day moving average, it is considered a bearish phase. Historically, a significant portion of Bitcoin's profits has occurred during periods when the Cycle Momentum is above 0.

Another indicator, the 'Bullish-Bearish Cycle Indicator,' has also shown changes. A 'Golden Cross' occurred when the 30-day moving average broke above the 365-day moving average. CryptoQuant analyzed that similar trends were observed during market recovery processes in 2015, 2019, 2020, and 2023.

Overall on-chain indicators in the market are also improving. As of the 25th of last month, CryptoQuant's 'Bull Score Index' jumped from 30 to 80 in just one week, marking the highest level since October 2025. Among the 10 indicators that make up the index, 8 showed bullish signals.

However, additional confirmation is needed to determine if Bitcoin has entered a new bullish phase. CryptoQuant analyzed that while Bitcoin temporarily surpassed $80,000, a weekly closing price must be established above the 365-day moving average of $83,000 for the trend reversal signal to become clearer.

Simultaneous Increase in Spot and Futures Demand... "Actual Buying Over Leverage"

Changes are also being detected in terms of demand. For the first time since October 2025, both spot and futures demand for Bitcoin are increasing simultaneously. Notably, the fact that spot demand has turned from negative to positive is drawing attention.

According to CryptoQuant's analysis, after spot demand transitioned from negative to positive in the past, Bitcoin averaged a 18.1% increase over the following 60 days. In cases where the price rose, it accounted for 78% of the total.

The simultaneous increase in spot buying indicates a difference from price increases driven solely by leverage in the derivatives market. It can be interpreted as actual funds flowing in to buy Bitcoin, thereby supporting the price.

Whales Realize $1.2 Billion in Profits... Short-Term Overheating is a Concern

While bullish signals are increasing, indicators are also showing that caution is needed regarding short-term overheating. The unrealized profit rate for Bitcoin investors has risen to 20.5%, the highest level since June 2025. As more investors enter the profit zone due to price increases, the incentive for profit-taking has grown.

In fact, around $1.2 billion in profit realization has occurred, primarily among whale investors. The amount of Bitcoin flowing into exchanges has also increased to around 53,000 BTC. Generally, an increase in inflow to exchanges indicates that holders may be preparing to sell, which could limit price increases in the short term.

Views surrounding Bitcoin's unique '4-year cycle' are also mixed. While Bitcoin has historically shown a pattern of alternating between bullish and bearish phases around halving events, there are analyses suggesting that the existing cycle may weaken as the market size grows and institutional investor participation increases. Fidelity Investments pointed out that due to insufficient historical data on Bitcoin, caution should be exercised in mechanically applying the 4-year cycle to investment strategies.

Currently, on-chain data leans towards the view that the bearish trend is weakening in the medium to long term. However, in the short term, the accumulated unrealized profits and the increased inflow of whale profit realization into exchanges may act as selling pressure. Whether Bitcoin can stably surpass the $83,000 level and whether the Cycle Momentum continues to rise will be key indicators determining the transition to a bullish market.

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