Bitcoin on-chain metrics are repeating the bottom patterns of 2022: is the market preparing for a reversal?
Key on-chain indicators for Bitcoin are showing a frightening similarity to those of the 2022 bear market. The Supply in Profit metric has dropped to 51.9%, entering a zone traditionally associated with the cycle bottom phase. At the same time, the hash rate and mining difficulty are experiencing a record-long decline — already lasting about seven months. In my assessment, this combination of signals points to the approach of the final stage of the current correction.
Profit Share Falls — Holders in Loss
The "Supply in Profit" indicator is the percentage of circulating bitcoins that were purchased at a price below the current market price. It now stands at 51.9%, meaning nearly half of all coins are in loss. Historically, values above 80% correspond to a bull market and euphoria, the 55–80% range to a transitional phase, and levels below 55% to a bear market and bottom phase.
The current value of 51.9% has been steadily holding in the "bearish" zone since June. The downward trend has persisted since October 2025, and the metric is approaching the level of around 44%, which marked the absolute bottom of the 2022 bear market. In the previous cycle, the bottom phase lasted about eight months. If we apply this historical benchmark, the current phase could extend until September or October.
Hash Rate and Difficulty: Record Network Compression
The second critical signal is the dynamics of the hash rate and mining difficulty. Both indicators continue to decline within a global structural trend following sharp drops in January and February. A key difference in the current situation is that the decline is lasting noticeably longer than previous corrections. Historically, continuous declines lasted 64 days (May–July 2021) and 86 days (April–July 2024). The current decline has already stretched to 234 days — about seven months of continuous compression.
For Bitcoin, a prolonged decline in difficulty and hash rate, which reflect network security and fundamental stability, is a worrying signal. However, there is also a flip side: if a sustained upward trend takes hold in these indicators, it would become an important medium- and long-term signal of renewed interest and network expansion.
Analyst's Conclusion
Both indicators are now working in tandem: both holders and the network's fundamentals point to the lower phase of the cycle. I am inclined to believe that the market is in the final stage of consolidation before a potential reversal. However, given the record duration of the hash rate decline, investors should be prepared for the possibility that the bottom may be more prolonged than in previous cycles.