Five major historic indicators light up at the same time, suggesting the Bitcoin bear market has bottomed out

_Source: _Blockworks Research

Compiled / Odaily Planet Daily Golem（@web 3_golem）

Key takeaways:

• Bitcoin’s current price is down 50% from its all-time high; the bear market has lasted for over 40 weeks. A series of long-cycle indicators suggest the market may be at or near the bottom of both the price and time cycles;
• This month, the BTC-to-Nasdaq index hit the highest-ever oversold level. Earlier this year, in February, the BTC-to-gold pair also hit the highest-ever oversold level. Data approaching these extremes has typically preceded the appearance of long-cycle bottoms, and implied that over the next 1-3 years, Bitcoin would deliver strong performance and post positive returns;
• Bitcoin’s actual price (the on-chain total cost basis of circulating BTC supply) is currently $53k, which is 18% below the spot price. Historically, every bear-market low has seen Bitcoin’s price below its actual price, and in Bitcoin’s history, the price has been below the actual price only 12% of the time. From this point onward, Bitcoin has delivered quite substantial returns over a 1-3 year time horizon;
• Historically, bear-market cycles bottom around the 60th week after the all-time high, meaning the low point of this bear cycle may form by late November 2026;
• Taken together, the convergence of factors indicates that from now until December 2026, it may be an extremely attractive window for long-term “re-accumulation” of Bitcoin.

Diminishing returns and the need for conditional investing

Since March 2021, the Bitcoin price has been relatively stable; since November 2017, the BTC-to-Nasdaq index has also been relatively stable, spanning nearly nine years. From the current time span perspective, Bitcoin vs. stock indexes has been fairly steady in performance, while its volatility has been significantly higher than that of stock indexes. After risk adjustment, Bitcoin’s performance has lagged stock indexes.

This context is crucial for how to hold Bitcoin. As Bitcoin’s price rises and falls, its marginal returns will diminish. The passive, always-long strategies that have benefited holders in past cycles appear to be losing effectiveness. Therefore, to achieve excess returns, it becomes increasingly necessary to seize opportunities and add to or reduce Bitcoin holdings at the right time.

To find these opportunity windows, the indicators proposed in this article are all conditional signals. For most of history, these signals have been in a “silent” state, with their strongest signals appearing in the tail—only a few times per decade.

Currently, these signals have appeared simultaneously, and they all point to the same conclusion: Bitcoin may be at or approaching the bottom of the long-term cycle.

Indicator 1: Nasdaq/BTC relative strength signal

The first signal is constructed from the ratio of the Nasdaq 100 index to Bitcoin, using weekly closing prices calculated over the past 875 cycles. We compute a 14-period Relative Strength Index (RSI) of this ratio and smooth it using a 14-period simple moving average.

Rising RSI indicates the Nasdaq index is in an overbought state relative to Bitcoin; falling RSI indicates the opposite. This indicator is not an intraday trading technical indicator. It is the 14-week moving average of a 14-week oscillation metric. The transition between overbought and oversold states occurs over multi-year market cycles, not over days or weeks.

Nasdaq/BTC RSI

Nasdaq relative overbought is a rare event. In its historical data, the RSI moving average has been above 65 only 5.78% of the time, and above 70 only 0.35% of the time. These thresholds were crossed in only four periods: February 2015, February 2019, August 2022, and the period starting in late January 2026 and continuing to the present.

The current reading needs to be analyzed from three angles:

• First, the current level of 72.6 is at the highest point in history, 4.1 points higher than the prior high of 68.5 set in September 2022. All observations above 70 have occurred within the past month;
• Second, the current cycle has lasted 24 weeks, setting a record for the longest duration in history—far exceeding 11 weeks in 2015, 4 weeks in 2019, and 10 weeks in 2022;
• Third, over the past 16 years it has occurred only four times; the current situation is one of the rarest phenomena the indicator has ever shown.By this measure, this is the most severe overbought condition of Nasdaq versus Bitcoin in history. In other words, because this pair and its RSI can be read inversely, from a longer time frame it is the most severe oversold condition of Bitcoin versus Nasdaq in history.

Indicator 2: Long-term expected return

Using each instance where the Nasdaq/BTC RSI is above 66 as the marker, across the three cycles that have already occurred, both the expected return curves for BTC/USD and BTC/NAS100 show upward asymmetry—but only over longer time horizons.

Comparison of expected return curves for BTC/USD and BTC/NAS100

Expected return for Nasdaq/BTC RSI

This table has two important characteristics:

• First is the time span. Short-term expected returns have almost no reference value because the return range over 30-120 days is small and directionally mixed. For example, Bitcoin held in 2022 fell 29.1% within 120 days but rebounded 397% three years later. The relative strength signal has limited indicating power for the next 1-3 years.
• Second is the decay in return magnitude. A BTC return over three years in each cycle is about one-quarter to one-third of the prior cycle, which aligns with the marginal return decay discussed above. In all observations, Bitcoin significantly outperformed the Nasdaq index over the following three years.

Indicator 3: Gold/BTC relative strength signal

If the Nasdaq index represents Bitcoin’s status as a risk asset, then gold represents its status as a store of value for monetary worth.

By constructing a similar indicator on the Gold/BTC ratio, we observe similar data: readings above 66 are rare, exhibit mean-reversion characteristics, and cluster near extreme values. Based on this indicator, February 2026 is the period with the highest-ever overbought degree in the Gold/BTC pair in history.

Gold/BTC RSI

The rise in RSI for this pair occurs at the same time as the long-cycle price bottom for Bitcoin, proving it has typical characteristics. The expected return curve from this indicator is similar to the Nasdaq-based results above: within the 1-3 year time range, given how extreme the RSI data is, Bitcoin’s historical performance has been better than gold and the U.S. dollar.

Comparison of expected return curves for BTC/USD and XAU/BTC

Indicator 4: Bitcoin actual price (on-chain cost basis)

Bitcoin’s actual price estimate measures the total on-chain cost basis of all BTC in circulation. Unlike the spot price, which reflects Bitcoin’s current market value, the actual price measures the average price at which the existing supply last moved on-chain, thereby estimating the on-chain cost basis. From historical data, the actual price represents Bitcoin’s deep value.

Bitcoin on-chain actual price

The actual price is a reference benchmark rather than a floor. At present, Bitcoin’s actual price is $53,000, which is 18% below the spot price. In Bitcoin’s spot-price history, the spot price has been below the actual price only 12% of the time.

Similar to the RSI indicator discussed above, this is a tail-end cyclical signal. Historically, every bear-market low in Bitcoin’s spot price has fallen below the actual price, and after entering this region, prices usually fall further before eventually bottoming out. Therefore, dropping to or below $53,000 fits historical behavior rather than contradicting it.

From the point of entering this region, long-term, the expected returns have remained quite attractive.

Price action after Bitcoin’s spot price falls below the actual price

Starting from the first weekly close in each cycle that falls below the actual price, historical data shows that over the following 150 weeks, prices have shown significant positive returns. The magnitude of these figures declines from cycle to cycle, consistent with the return-decay trend of the RSI indicator, but the direction remains the same.

Historically, Bitcoin’s first close below the actual price signals the late stage of a bear market rather than the beginning or the middle. Even so, the BTC spot-to-actual-price multiple has fallen sharply from the prior peak levels in 2025, indicating that market risk has been reduced.

Indicator 5: The cycle clock

The final indicator is the most straightforward: it shows the historical structure of Bitcoin bear markets and uses price and time as the measuring standard.

Duration of Bitcoin bear markets

Across the cycles in 2013, 2017, and 2021, Bitcoin’s price lows typically appeared around the 60th week after the all-time high. The current cycle is in week 40, with a drawdown of 50%, which is broadly consistent with the trajectories of the first three cycles. If the week-60 pattern holds, then Bitcoin’s low should form by late November 2026.

Even though the RSI indicators for the Nasdaq 100/BTC and Gold/BTC pairs have already shown extreme readings, the drawdown in this cycle still matches the historical drawdown path.

The time dimension also compresses the intervals between cycles: each cycle drops back to a new all-time high over a progressively shorter period. In other words, the time required to return to the previous high is shorter than in the prior cycle. If this trend continues, the new all-time high should occur within 120 weeks after the prior high, meaning a new high should appear before February 2028.

These two observations by themselves contain no mechanism—they are merely empirical regularities observed in only a few cycles. As time anchors, they layer on top of the conditional signals above, limiting the remaining downside room for Bitcoin. If the historical structure holds, then Bitcoin is roughly 20 weeks away from its low point, or it may have already bottomed out.

Bitcoin price outlook

Given the current situation, the following scenario combinations—together with the background and historical results described earlier—outline a set of potential paths for Bitcoin over the next three years. This is not a prediction or assertion about all possible outcomes; it is intended to answer one question: if the current situation resolves in the same way as similar historical situations, where will the price go?

Assuming marginal returns on both upside and downside diminish, and considering that the actual price still trades at a discount, along with the historical drawdown paths in terms of price and time, we construct the possible trajectories for Bitcoin’s price under these conditions. Each possibility is derived from Bitcoin’s three-year performance after a given signal appears, and is scaled by different strengths (0.33 to 0.80) in line with periodic return compression. The ranges marked in the chart represent historical distribution boundaries after reducing strength, not the boundaries of market volatility.

The shaded bands show the range of these possibilities.

Predicted Bitcoin price trajectory

These shaded bands are proportional recreations of the historical paths after indicator signals historically fired. All of these possible outcomes are satisfactory: they describe plausible historical replay scenarios rather than all possible outcomes, and they do not include scenarios where the signals fail.

Although the expected return outcomes by end-2026 may vary, by 2027 and 2028 the return distribution will clearly shift toward a positive, asymmetrical upward trend. Given the current market environment and the forecast path, the next few quarters may provide an extremely attractive opportunity to hold Bitcoin as a long-term investment.

Bitcoin price prediction for the next 3 years

Risks and limitations

Each indicator should be evaluated and weighed according to its own value. These indicators should not be interpreted as mechanisms and causal relationships for cycle bottoms. Instead, they should be viewed as manifestations that appear alongside historical long-cycle bottoms and share corresponding characteristics.

Moreover, the listed indicators are not all indicators that could be used as approximations of long-cycle bottom prices. The sample size underlying these analyses is small: the RSI moving average shows four independent cycle samples as effective, with one cycle still not determined; the actual price study is based on four cycles, while the cycle symmetry analysis is based on the first three completed cycles. With such a large sample, historical expected return distributions can describe historical behavior, but a deviation in even one cycle would significantly weaken all relationships presented.

Additionally, the signals presented here should not be viewed as independent corroboration. The RSI indicator, how close price is to the actual price, and the position within the cycle clock are, to a large extent, measurements of the same underlying fact: Bitcoin has retreated sharply from its highs and has been declining. In any deep, prolonged drawdown, each indicator tends toward extremes. Thus, when they appear together, it is more like the same observation measured in multiple ways rather than multiple independent and unique observations.

Structural changes could cause this cycle to ultimately diverge. The current cycle is the first cycle with greater complexity, including ETF holdings, substantial corporate holdings, and increased trading of derivatives such as options and perpetual futures. The four-year cycle framework may ultimately be proven to be only a description of the four observed outcomes, rather than a sustained characteristic of the asset.

Finally, the RSI signals are relative. If Bitcoin outperforms the Nasdaq or gold, it could mean that both assets are rising—or it could mean that they are falling at different speeds. Even if the RSI signal is favorable for Bitcoin, if the stock market or gold prices pull back from their current highs, Bitcoin’s nominal price could also be dragged lower. The signals shown here have almost no predictive power for the period before November; they only reflect asymmetry in the price path over the next 1-3 years.

Conclusion

But when considering the indicators above, the conclusion we reach is that Bitcoin may be at or near the cycle bottom, which may form before year-end, after which the uptrend is expected to resume.

Each signal appears near its historically rare extreme values. And in the past, each signal has preceded years in which Bitcoin would capture substantial gains and outperform equities. If the low point has not appeared yet, then the period from now to the low point is likely to be a highly attractive window for long-term Bitcoin re-accumulation. Historically, these signals sit silently most of the time, but now they have issued “green light” signals.