Bitcoin on-chain metrics are approaching 2022 bear market levels — a signal of cycle bottom formation
The Bitcoin market is sending increasingly clear signals that it is approaching the end of the current bear cycle. Key on-chain indicators, which traditionally point to a bottoming phase, are showing a striking similarity to the metrics observed during the height of the 2022 bear market. Two complementary metrics — the supply in profit ratio and the dynamics of hashrate and mining difficulty — are synchronously indicating that the market is likely in the final stage of capitulation.
Supply in Profit: Entering the "Bear Zone"
The "Supply in Profit" (SiP) metric, which reflects the percentage of bitcoins currently in profit, has dropped to 51.9%. This value has already entered the so-called "bear zone" (below 55%), where the market historically shows signs of a bottom. For context: levels above 80% correspond to bull market euphoria, while the 55–80% range represents a transitional phase. The current decline has been ongoing since October 2025, and the metric is steadily moving toward the approximately 44% mark that denoted the absolute bottom of the 2022 cycle. If the historical pattern repeats, the current bottoming phase could extend until September-October, making it one of the longest in history.
Hashrate and Difficulty: Record-Long Compression
The second critical signal is an unprecedentedly prolonged decline in hashrate and mining difficulty. The downturn in these indicators has lasted for 234 consecutive days — about seven months. For comparison, previous record periods of continuous decline were 64 days (May-July 2021) and 86 days (April-July 2024). The current compression of the mining network is the longest in Bitcoin's history. This reflects fundamental pressure on miners, who are forced to shut down equipment amid low prices and high competition. While this dynamic looks alarming, it often precedes a trend reversal: when difficulty stabilizes and begins to rise, it becomes a powerful medium- and long-term recovery signal.
Commentary from Cryptalist analyst: The synchronous movement of both indicators — the "behavioral" (SiP) and the "fundamental" (difficulty/hashrate) — is rare. In the previous cycle, the bottom was confirmed precisely by such a coincidence. However, the key question now is not "will there be a bottom?" but "how long will it last?". Seven months of mining compression is extreme. If difficulty starts to rise in the coming weeks, we will get one of the strongest bullish signals in recent years. If the decline continues, the market could enter a prolonged depression phase, similar to 2018–2019. Keep an eye on the hashrate: it is an indicator that leads price by 2–4 weeks.