Bitcoin on-chain metrics are approaching the bear market bottom levels of 2022 — analysis
Key on-chain indicators for Bitcoin are sending signals last seen at the height of the 2022 bear market. Network data analysis shows that 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 prolonged decline of about seven months.
These two indicators, in my view, work in tandem, reflecting different aspects of the same process. The first—supply in profit—characterizes holder sentiment and the current phase of the market cycle. The second—the dynamics of hash rate and difficulty—speaks to the fundamental resilience of the network. The convergence of their signals points to an approach toward the final stage of the cyclical bottom.
Supply in Profit: In the Bear Market Zone
The "Supply in Profit" metric shows the percentage of circulating bitcoins that are in profit. Values above 80% traditionally correspond to a bull market and euphoria, the 55–80% range to a transitional phase, and levels of 55% and below to a bear market and bottom phase.
The current value of 51.9% is not just a bear zone but a direct path to the absolute bottom levels of 2022, which were recorded at around 44%. The downward trend for this indicator has persisted since October 2025. If we rely on the history of the previous cycle, where the bottom phase lasted about eight months, the current consolidation could extend until September-October of this year.
Hash Rate and Difficulty: Record Prolonged Decline
The second alarming yet telling signal is the dynamics of hash rate and mining difficulty. Both indicators continue to decline within a global structural trend following a sharp drop in January and February. The key difference between the current situation and previous 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 already stretched to 234 days—about seven months of continuous contraction. For Bitcoin, such a prolonged decline in fundamental network security indicators is an unfavorable signal, indicating significant pressure on miners.
However, there is a flip side. If a sustained upward trend takes hold in these indicators, it will become an important medium- and long-term signal of renewed interest and network expansion. Thus, both indicators are now working synchronously: both holders and the network's foundation point to the lower phase of the cycle.
My expert opinion: The convergence of these two metrics is an extremely rare event that has historically preceded significant reversals. The current situation resembles a "golden zone" for long-term accumulation, although short-term volatility and the prolonged nature of the consolidation may test the patience of even the most steadfast investors. The key trigger for a trend change is the recovery of the hash rate above its moving averages.