Key on-chain indicators for Bitcoin are showing patterns last seen during the 2022 bear market. The supply in profit has dropped to 51.9%, entering the "bear market" zone, while the hash rate and mining difficulty are experiencing a record-long decline—now lasting about seven consecutive months.
These two seemingly different indicators are actually closely interconnected and point to the same phase of the market cycle—a prolonged bottom zone. The first reflects the psychological state of holders and the extent of their capitulation. The second reflects the fundamental resilience of the network and the economics of mining. Their simultaneous deterioration is a powerful signal, which I view as confirmation of movement toward the cycle's final bottom.
Supply in Profit: A Return to Bear Market Levels
The "Supply in Profit" metric measures the percentage of all bitcoins in circulation that are in profit at the current price. It is an excellent compass for determining the cycle stage. Values above 80% traditionally correspond to a bull market and euphoria. The range of 55–80% is a transitional phase. A level of 55% and below is a confident bear market and bottom zone.
Currently, this indicator stands at 51.9%. It has been firmly in the bearish zone since June, with a downward trend persisting since October 2025. The metric is steadily approaching the mark of around 44%, which was the absolute bottom of the bear market in 2022. Applying historical benchmarks, the current bottom phase could extend until September or October, mirroring the eight-month pattern of the previous cycle. On-chain data strongly suggests we are moving toward a final point, not just a local correction.
Record Decline in Hash Rate and Difficulty: Unprecedented Duration
The second, and perhaps even more alarming, signal is the dynamics of mining difficulty and hash rate. Both indicators continue to decline within a global structural trend following sharp drops in January and February. The key difference between the current situation and past corrections is the duration of the decline.
Historically, continuous hash rate declines lasted 64 days (May–July 2021) and 86 days (April–July 2024). The current decline has stretched to 234 days—about seven months of continuous compression. For Bitcoin, such a prolonged decline in fundamental network security indicators is an extremely unfavorable signal. It suggests not a short-term fluctuation, but deep structural pressure on miners.
However, as I note, there is also a flip side. If a sustained upward trend takes hold in these indicators, it will become an important medium- and long-term signal of restored interest and network expansion. Thus, both indicators are now working in tandem: both holders and the network's foundation point to the bottom phase of the cycle.
My expert assessment: the simultaneous achievement of extreme values across two independent classes of metrics is not a coincidence. The market is likely in the final stage of the bearish phase. The entry point may be close, but to confirm a reversal, it is necessary to see stabilization and subsequent growth in the hash rate as a primary fundamental indicator.