On-chain data shows that the Bitcoin PnL Index is currently in a transition phase that has historically led to market bottoms, though not right away.
Bitcoin PnL Index Has Been Declining Recently
In a recent post on X, community analyst Maartunn discussed the latest trend in the Bitcoin PnL Index. This index combines several key on-chain metrics into one overall valuation indicator for Bitcoin.
Related Reading: Dormant Cardano Whales Suddenly Come Alive: Is A Turning Point Near?
The metrics include the MVRV Ratio, NUPL, and LTH/STH SOPR. The first two track unrealized investor gains and losses, while the last one looks at gains or losses that holders are actually making through their transactions.
Here’s the chart Maartunn shared, showing the 365-day moving average (MA) of the Bitcoin PnL Index over the cryptocurrency’s history:
As the chart shows, the 365-day MA of the Bitcoin PnL Index has been steadily declining since Q4 2025, reflecting the shift to a bearish market. So far, the indicator hasn’t dropped into negative territory, which means that, from this metric’s perspective, Bitcoin hasn’t become “undervalued” yet.
Historically, bear market bottoms have often occurred when the PnL Index falls into the red zone. So, it’s possible we’ll see a similar pattern this time around. However, it’s worth noting that this cycle has already been different from previous ones during the bull market. In past cycles, the PnL Index had a single major peak that matched the market top. But this cycle saw two similarly sized peaks, happening alongside the Q1 and Q4 2025 tops. So, it remains to be seen how the indicator will behave as this bear market plays out, and whether it will resemble past cycles.
Related Reading: Bitcoin Back At Production Cost: Analyst Says Best Value Zone Starts Here
In other news, the recent price drop has pushed Bitcoin’s short-term holder (STH) whales into deep losses, as the analyst pointed out in another X post. STH whales are investors who hold at least 1,000 Bitcoin and bought it within the last 155 days.
Here’s a chart showing the current net profit or loss for these large investors:
“Short-Term Holder Whales are now sitting on -$16.4B in unrealized profit and loss, the deepest level of stress seen in this cycle,” Maartunn noted.
BTC Price
At the time of writing, Bitcoin is trading around $61,700, down more than 6% over the past seven days.
Featured image from Dall-E, chart from TradingView.com
Frequently Asked Questions
Here is a list of FAQs based on your topic Is the Bitcoin bottom still not here This indicator is still in a transition phase
BeginnerLevel Questions
1 What exactly is a Bitcoin bottom
A bottom is the lowest price Bitcoin reaches during a market downturn before it starts going back up Its the point where sellers run out of steam and buyers start taking over
2 What does it mean when an indicator is in a transition phase
It means the indicator hasnt made up its mind yet Its moving from a bearish signal to a bullish signal but it hasnt fully flipped Think of it like a traffic light turning from red to yellowyou still have to wait before you can go
3 So is the bottom here or not
Based on this specific indicator the answer is not yet The indicator is still in that transition phase meaning it hasnt confirmed a clear bottom Its a wait and see situation
4 Why cant the indicator just tell us for sure
Indicators are based on past price and volume data They are tools not crystal balls A transition phase means the data is mixedsome points look like a bottom others dont It needs more time and price action to confirm a trend
5 Should I buy Bitcoin now or wait
This is a personal risk decision Because the indicator is in transition buying now is a bet that the bottom is close Waiting for the indicator to fully confirm a bullish signal is safer but you might miss the very lowest price
Advanced Questions
6 Which specific indicator are we talking about
While not named in your statement this language is very common for onchain indicators like the MVRV ZScore Puell Multiple or the Bitcoin Rainbow Chart These all have danger zones and buy zones with a transition period between them
7 How long can a transition phase typically last
It varies wildly In past cycles this phase could last anywhere from a few weeks to several months Its a period of market indecision where price chops sideways or makes lower highs and lower lows