A CryptoQuant analyst suggests that Bitcoin’s recent recovery still resembles a bear market rally, based on signals from on-chain data. The rebound has occurred alongside an increase in the supply held by long-term holders (LTHs), defined as investors holding their coins for more than 155 days.
On-chain data indicates that Bitcoin’s bottoming process began as LTH supply started rising. After a period of decline from mid-2025 to January 2026—showing long-term holders were distributing their coins—the trend reversed at the end of January, with coins beginning to re-enter the LTH supply. It’s important to note that this metric has a 155-day delay, meaning current accumulation isn’t immediately reflected. However, the shift suggests growing holding conviction as Bitcoin entered a consolidation phase, with 345,000 BTC maturing into this group over the past month. Maartunn, the analyst, described this as “structural strength building under the surface.”
Despite this underlying strength, the price recovery has faced selling pressure. Short-term holders (STHs), who hold coins for 155 days or less, sent approximately 60,000 BTC to exchanges. Data also shows STHs have been selling at a loss, even during the recent price surge. Selling has also come from large entities holding over 100 BTC, whose exchange inflows have increased.
This selling pressure from STHs and large holders may explain why Bitcoin’s rally has struggled to gain further momentum, despite the positive trend in LTH supply. “For now, this still looks like a bear market rally,” Maartunn commented, adding, “But a strong breakout could quickly shift the trend.”
After surging above $78,000 last week, Bitcoin has since pulled back to around $75,300.
Frequently Asked Questions
FAQs Analyst Warns Bitcoins Recovery May Just Be a Bear Market Rally
BeginnerLevel Questions
1 What is a bear market rally
A bear market rally is a temporary price increase during a longerterm downward trend Think of it as a shortlived bounce or a dead cat bounce that doesnt reverse the overall decline
2 Why would someone call Bitcoins recent rise a bear market rally
Analysts look at factors like trading volume market sentiment and economic conditions If the rise lacks strong sustained buying pressure or occurs amid negative macro trends it might be seen as temporary rather than a true recovery
3 Whats the difference between a bear market rally and a real bull market
A real bull market is a prolonged period of rising prices driven by strong fundamentals and widespread optimism A bear market rally is a brief uptick within a bear market often followed by new lows
4 How can this warning affect my investment
If the recovery is just a rally prices could drop again This warning is a reminder to be cautious avoid investing more than you can afford to lose and not get caught up in shortterm hype
5 What are some signs that a recovery is genuine
Look for sustained high trading volume positive developments in adoption and the price holding above key support levels over time
Advanced Practical Questions
6 What technical indicators do analysts use to identify a bear market rally
Common indicators include
Lower highs and lower lows The rally fails to break above the previous major high
Divergence in volume Price rises but trading volume is declining
Moving averages The price stays below key longterm averages
RSI Shows overbought conditions during the rally
7 What fundamental factors could support the argument that this is more than a rally
Factors like the approval of Bitcoin ETFs in new markets a shift in central bank monetary policy or a major reduction in miner selling pressure could suggest a more fundamental recovery
8 Whats a practical strategy if I think this is just a bear market rally