On-chain data reveals that CryptoQuant’s Bitcoin Bull-Bear Market Cycle Indicator has recently fallen sharply into bearish territory, reaching its most negative level since the 2022 market bottom.
In a recent X post, CryptoQuant community analyst Maartunn highlighted the latest movement in this indicator, which identifies the current market phase for Bitcoin. The indicator is derived from CryptoQuant’s P&L Index, a composite valuation metric that combines key on-chain indicators: the MVRV Ratio, NUPL, and LTH/STH SOPR. The MVRV Ratio and NUPL measure unrealized profits and losses across the network, while LTH/STH SOPR tracks realized profits and losses from investor transactions.
According to CryptoQuant, the P&L Index crossing above or below its 365-day moving average signals a shift between bull and bear markets. A break above the average suggests a move into a bullish phase, while a drop below indicates a bearish transition. The Bull-Bear Market Cycle Indicator tracks the distance between the P&L Index and this moving average to show whether the market is changing direction or reaching an extreme.
The chart shared by Maartunn shows that the indicator dropped below zero in late 2025, signaling the P&L Index fell below its 365-day average—a bearish signal. Since then, the indicator has continued to decline as Bitcoin’s price has weakened, recently hitting lows not seen since the 2022 bear market bottom following the FTX collapse.
This trend suggests the P&L Index is approaching an extreme low relative to its moving average. Historically, such levels have often coincided with market bottoms. However, the indicator has typically spent some time in “extreme bear” territory before a reversal occurs. It remains to be seen how long this phase will last this time.
At the time of writing, Bitcoin is trading around $68,000, down 4% over the past week.
Frequently Asked Questions
FAQs Bitcoins BullBear Cycle Indicator Hits Lowest Level Since FTX Collapse
BeginnerLevel Questions
1 What is a bullbear cycle indicator
Its a metric that tries to measure overall market sentiment by comparing Bitcoins price to its longterm average It helps gauge whether the market is in a greedy optimistic phase or a fearful pessimistic one
2 What does it mean that this indicator has fallen to its lowest point since the FTX collapse
It means the metric is showing a level of extreme fear or pessimism in the Bitcoin market that we havent seen since the chaotic period immediately following the collapse of the FTX exchange in November 2022 which was a major market bottom
3 Is this a good or bad sign for Bitcoin
Historically when this indicator reaches such extreme lows it has often signaled that the market is oversold and may be near a potential turning point or bottom However its not a guarantee of an immediate price rebound
4 Should I buy Bitcoin now because of this
While some investors see extreme fear as a potential buying opportunity you should never make investment decisions based on a single indicator Always do your own research and consider your personal financial situation and risk tolerance
Advanced Practical Questions
5 Which specific indicator is being referred to here
The most common indicator referenced in this context is the Puell Multiple which analyzes the daily issuance value of new bitcoins relative to its yearly average A very low Puell Multiple suggests miner revenue is stressed which has historically coincided with market bottoms
6 What are the benefits of watching this kind of indicator
It can help investors
Identify potential extremes Spot periods of irrational exuberance or excessive fear
Practice contrarian thinking Go against the crowd sentiment when it reaches an extreme
Inform longterm strategy Use it as one data point for dollarcost averaging or rebalancing a portfolio
7 What are the common problems or limitations with this indicator
Its not a timing tool It can signal an oversold market for weeks or months before a recovery begins