Bitcoin has been on a tear over the past week, up more than 10 percent, trading at around $79,300 as of Thursday. Two key on-chain indicators show that the premier cryptocurrency may be approaching an inflection point, promising further upside.
Bitcoin shows strong signs of trend reversal
According to on-chain data received on Thursday, the Bitcoin Bull-Bear Market Cycle Indicator is on an uptrend. The metric’s 30-day moving average has surged sharply, moving back above the 365-day average.
For the uninitiated, the Bull–Bear Market Cycle Indicator is an on-chain tool that compares short-term and long-term trends in metrics such as Bitcoin investor profitability to identify shifts between bearish and bullish market regimes.
When its short-term average moves above its long-term average, it can signal that bearish momentum is fading and the market may be transitioning toward recovery.
Past data shows similar patterns back in 2015, 2019, 2020, and 2023 during the respective recovery phases. This is when the digital asset’s bearish momentum had peaked, and the market was moving from a capitulation phase towards disbelief rally.
The Bull–Bear Market Cycle Indicator is less about calling the exact bottom than identifying a change in investor profitability – losses stop deepening, demand absorbs supply and sentiment begins to recover.
However, persistence is critical for the aforementioned metric. The crossover becomes credible only if spot demand, liquidity and bullish sentiment remain supportive.
The second indicator pointing toward a bullish trend reversal is the BTC Risk Index. The index recently reached the descending trendline around which major stress peaks and local Bitcoin floors have repeatedly formed.
Historically, these contacts have produced attractive risk-reward conditions because fear and selling pressure were already elevated, weaker positions had been flushed out and much of the potential downside had already been absorbed.
BTC market stress plunging
A falling BTC Risk Index represents a release of market stress rather than a deterioration in opportunity.
Previous declines from this descending resistance have generally coincided with higher Bitcoin prices, renewed appetite for risk and a broader transition back toward a risk-on environment.
On Tuesday, CryptoQuant CEO shared similar thoughts, saying that BTC’s bear market may be over. Meanwhile, stablecoin net inflows trend to exchanges also shows looming upside for the top digital asset by market.
