BTC Current Affairs

Bitcoin's Bear Cycle Is Done. Or Maybe It's Not. Here's What CryptoQuant Says.

2026-08-28

On August 25th, CryptoQuant founder Ki Young Ju made the call: Bitcoin's bear cycle is officially over. The declaration hinges on a composite profitability metric that's been reliably accurate at spotting macro reversals before. Fair enough. But this is the crypto market, so let's dig into whether that actually means anything.

The Bull/Bear Market Cycle Indicator measures something called the P&L Index—basically how far Bitcoin's aggregate profit and loss positions sit from their 365-day moving average. On August 26th, it flipped positive at 0.042, entering "bull" territory for the first time in nearly ten months. Bitcoin itself has rallied more than 25% since early last week, so the timing looks good on paper.

The P&L Index itself is built from three onchain metrics: the MVRV ratio, net unrealized profit/loss, and the spent output profit ratio. They all measure the same essential thing—whether Bitcoin holders are sitting in profit or loss. Values above zero signal bullish conditions. Below zero means bearish. Simple enough.

The parallel here is January 2023, when this same indicator caught the recovery from Bitcoin's 2022 bloodbath. For most of 2026, the metric stayed decisively negative. The low came on February 5th when Bitcoin hit $60,000 and the indicator read -1.244—"extreme bear" territory. From there, things have gradually shifted.

CryptoQuant's Bull Score reinforces the thesis. It climbed from 30 to 80 over the past week, with eight of ten components now flashing bullish signals. The US Treasury's plan to double long-term government bond buybacks to at least $4 billion per operation helped matters. So did speculation that the US government might actually purchase Bitcoin. Wild times.

But here's the catch—and it's a meaningful one. The firm still needs to see Bitcoin close above roughly $83,000 to truly confirm this as a bull market signal. Until that happens, CryptoQuant treats this as an early-stage recovery that hasn't actually proven anything yet. You can see their point.

The short-term picture also looks overheated. Traders' unrealized profit margins hit 20.5%—the highest since June 2025—and history suggests profit-taking follows. Short-term holders have already started banking gains. Between August 20th and August 22nd, they booked $1.2 billion in realized profits, including a single-day record of $614 million on August 20th. Money is walking out the door.

CryptoQuant itself admits the indicator isn't infallible. In March 2022, it flashed the same early-bull signal and got rejected hard. Bitcoin kept falling anyway. That's not a trivial failure—it's the kind of false signal that costs real money if you actually trade on it.

So what's the takeaway? The onchain metrics genuinely have shifted. The Bull/Bear Indicator is showing what it showed in early 2023 before a genuine recovery took hold. But that's a signal, not proof. Bitcoin needs to hold $83,000 and traders need to stop taking profits. Until then, we're looking at a regime-change possibility, not a certainty.

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