Key on-chain indicators for Bitcoin signal an approach to the final phase of the bear cycle. The supply in profit has dropped to 51.9%, entering the bear market zone, while the hash rate and mining difficulty are showing a record-long decline—already around seven months.
These two indicators, at first glance, reflect different aspects of the market. The first reflects holder sentiment and the cycle stage, while the second reflects the network's fundamental resilience. However, when viewed together, the picture becomes extremely clear: we are observing classic signs of a prolonged bottom phase, which historically precedes a trend reversal.
Supply in Profit: Bear Zone Confirmed
The "Supply in Profit" metric shows what percentage of all circulating bitcoins are currently in profit. The current value of 51.9% is not just a number. It is a firm position in the zone that historically corresponds to a bear market and accumulation phase. For context: values above 80% indicate euphoria and a bull market, the 55–80% range is a transitional phase, and anything below 55% is "bear" territory and bottom-finding.
The downward trend for this indicator has been ongoing since October 2025. The metric is now approaching the mark of around 44%, which marked the absolute bottom of the 2022 bear market. If we apply historical benchmarks, the current phase could extend until September or October of this year. The repetition of market cycles is a strong argument, and on-chain data now confidently points to a move toward the final bottom.
Hash Rate and Difficulty: Anomalously Long Compression
The second signal is the dynamics of mining difficulty and network hash rate. Both indicators continue to decline within a global structural trend following sharp drops in January and February. The 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 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 resilience, is an extremely unfavorable signal. It indicates that some miners are exiting the game and confidence in the short-term outlook is waning.
Is There Light at the End of the Tunnel?
Despite the grim picture, it is important to note the flip side. If a sustained upward trend takes hold in these indicators, it will become a significant medium- and long-term signal of renewed 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 analysis: The market is going through a painful but necessary process of "washing out" weak hands and inefficient miners. Historically, such phases have preceded the strongest bull rallies. However, the key question is timing. If we follow historical patterns, it could take several more months before a reversal. Patience and discipline are now the investor's main allies.