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Five key indicators are flashing simultaneously! Has Bitcoin hit its cycle bottom? A trough may be confirmed in 20 weeks

Author: Blockworks Research

Compiled by Golem, Odaily Planet Daily

Key Takeaways:

Bitcoin is currently trading 50% below its all-time high, and the bear market has lasted over 40 weeks. A series of long-term cyclical indicators suggest the market may be at or near a price and time cycle bottom.

This month, Bitcoin reached its most oversold level ever relative to the Nasdaq index, and in February of this year, it also hit its most oversold level historically against gold. Historically, readings approaching these extremes have typically signaled the emergence of long-term cycle lows and have preceded strong Bitcoin performance with positive returns over the subsequent 1–3 years.

Bitcoin’s realized price—the total on-chain cost basis of the circulating supply—is currently $53,000, which is 18% below the spot price. Historically, Bitcoin has traded below its realized price at every bear market low, and has spent only 12% of its entire history below this level. From such points, Bitcoin has delivered substantial returns over 1–3 year horizons.

Historical bear market cycles typically bottom around the 60th week following an all-time high, implying the current cycle’s low could occur around late November 2026.

Taken together, the convergence of multiple factors suggests that the period from now through December 2026 could represent an exceptionally attractive window for long-term Bitcoin accumulation.

Since March 2021, Bitcoin’s price has remained relatively flat; similarly, Bitcoin’s performance relative to the Nasdaq has been flat since November 2017—a span of nearly nine years. Over this timeframe, Bitcoin has exhibited relatively stable performance against equity indices despite significantly higher volatility. On a risk-adjusted basis, Bitcoin has underperformed equity indices.

This context is critical for how one holds Bitcoin. As Bitcoin’s price rises and falls, its marginal returns diminish. The passive, always-long strategy that generated consistent gains for holders across previous cycles is now losing efficacy, making timely accumulation or reduction of Bitcoin exposure increasingly necessary to achieve excess returns.

To identify these opportunity windows, the indicators presented in this article generate conditional signals—signals that remain largely 'silent' throughout most of history and produce their strongest readings in tail events, occurring only a few times per decade.

Currently, these signals have all appeared simultaneously and point to the same conclusion: Bitcoin may be at or near a long-term cycle price bottom.

The first signal is constructed based on the ratio of the Nasdaq 100 Index to Bitcoin, calculated using weekly closing prices over the past 875 periods. We compute a 14-period Relative Strength Index (RSI) for this ratio and smooth it using a 14-period simple moving average.

A rising RSI indicates that the Nasdaq is relatively overbought compared to Bitcoin; a falling RSI suggests the opposite. This indicator is not an intraday trading tool—it is the 14-week moving average of a 14-week oscillator, with overbought and oversold transitions occurring over multi-year market cycles rather than days or weeks.

Nasdaq/BTC RSI

Nasdaq relative overbought conditions are rare events. The RSI moving average has been above 65 only 5.78% of the time in its historical data and above 70 just 0.35% of the time. These thresholds were breached in only four periods: February 2015, February 2019, August 2022, and the period beginning in late January 2026 and continuing to the present.

The current reading requires analysis from three perspectives:

First, the current level of 72.6 is at a historical high, exceeding the previous peak of 68.5 reached in September 2022 by 4.1 points; all observations above 70 have occurred within the past month;

Second, the current cycle has lasted 24 weeks, setting a historical record—far surpassing 11 weeks in 2015, 4 weeks in 2019, and 10 weeks in 2022;

Third, this phenomenon has occurred only four times in the past 16 years, making the current situation one of the rarest instances of this indicator. By this measure, it represents the most extreme overbought condition ever recorded for the Nasdaq against Bitcoin—or, conversely, since the pair and its RSI can be interpreted inversely, the most extreme oversold condition ever for Bitcoin against the Nasdaq on a longer time frame.

Using each instance when the Nasdaq/Bitcoin RSI exceeded 66 as a marker, in the three observed cycles, the expected return curves for both BTC/USD and BTC/NAS100 exhibited upward asymmetry—but only over longer time horizons.

Comparison of Expected Return Curves: BTC/USD vs. BTC/NAS100

Nasdaq/BTC RSI Expected Returns

This table exhibits two key characteristics:

First is the time horizon. Short-term expected returns offer almost no useful reference, as returns over 30–120 days are modest in magnitude and inconsistent in direction—for example, Bitcoin held in 2022 declined by 29.1% over 120 days but rebounded by 397% three years later. Relative strength signals provide limited guidance for price movements over the next one to three years.

Second is the attenuation of return magnitudes. The three-year Bitcoin returns in each cycle were roughly one-quarter to one-third of those in the prior cycle, consistent with the principle of diminishing marginal returns discussed earlier. In all observed cases, Bitcoin significantly outperformed the Nasdaq over the subsequent three years.

If the Nasdaq represents Bitcoin’s status as a risk asset, gold reflects its role as a store of monetary value.

Constructing a similar indicator based on the gold-to-Bitcoin ratio, we observe comparable patterns: readings above 66 are rare, exhibit mean-reverting behavior, and cluster around extreme values. According to this indicator, February 2026 marked the most overbought period in the history of the gold-to-Bitcoin ratio.

Gold/Bitcoin RSI

The rising RSI reading for this currency pair coincides with Bitcoin’s long-term cyclical price lows, exhibiting a typical pattern. The expected return profile of this indicator resembles the findings from our earlier analysis of the Nasdaq: over a 1–3 year horizon, Bitcoin has historically outperformed both gold and the US dollar when RSI readings reached such extreme levels.

Comparison of Expected Return Curves: BTC/USD vs. XAU/BTC

Bitcoin’s realized price estimates the total on-chain cost basis of all circulating Bitcoin. Unlike the spot price, which reflects Bitcoin’s current market value, realized price measures the average price at which the existing supply was last moved on-chain, thereby approximating the on-chain cost basis. Historically, realized price has represented Bitcoin’s fundamental value floor.

Bitcoin On-Chain Realized Price

Realized price serves as a reference point, not an absolute floor. Currently, Bitcoin’s realized price stands at $53,000—18% below the spot price—and historically, Bitcoin’s spot price has traded below realized price only 12% of the time.

Similar to the RSI indicator mentioned earlier, this situation constitutes a late-cycle signal. Every historical bear market low for Bitcoin’s spot price has occurred below realized price, and once entering this zone, prices have typically declined further before ultimately bottoming out. Therefore, a drop to or below $53,000 aligns with historical precedent rather than contradicting it.

Historically, expected returns have been consistently attractive over the long term once this zone is entered.

Bitcoin Spot Price Performance After Falling Below Realized Price

Starting from the first weekly closing price below the realized price in each cycle, historical data shows that significant positive returns occurred within the subsequent 150 weeks. The magnitude of these gains declined progressively across cycles, aligning with the decay trend observed in the RSI indicator, yet maintaining the same directional bias.

Historically, Bitcoin’s first weekly close below its realized price has marked the late stage of a bear market, rather than its beginning or midpoint. Nevertheless, the multiple between Bitcoin’s spot price and its realized price has dropped sharply from its prior peak of 2,025x, indicating reduced market risk.

The final indicator is the most concise, illustrating Bitcoin’s historical bear market structure using price and time as metrics.

Bitcoin Bear Market Duration

In the 2013, 2017, and 2021 cycles, Bitcoin’s price troughs typically occurred around week 60 following the all-time high. The current cycle is at week 40, with a 50% drawdown, largely consistent with the patterns seen in the previous three cycles. If this pattern holds through week 60, Bitcoin’s bottom would form by the end of November 2026.

Although the RSI indicators for the Nasdaq 100/Bitcoin and Gold/Bitcoin have already shown extreme readings, the current cycle’s drawdown remains consistent with historical drawdown trajectories.

Time compression has also shortened the intervals between cycles, with each cycle reaching a new all-time high in progressively less time. In other words, the time required to retest the prior all-time high has become shorter than in the previous cycle. Assuming this trend continues, a new all-time high should emerge within 120 weeks of the prior peak, implying a new high before February 2028.

These two observations themselves do not imply any underlying mechanism; they are merely empirical regularities observed across a few cycles. They serve as temporal anchors, layered atop the aforementioned conditional signals, thereby constraining Bitcoin’s remaining downside potential. If the historical structure holds, Bitcoin is approximately 20 weeks away from its bottom—or may have already reached it.

Given the current situation, the following scenario set combines the previously described context and historical outcomes to illustrate a range of potential paths Bitcoin could take over the next three years. This is not a prediction or assertion of likely outcomes, but rather an attempt to answer the question: if the current situation is resolved in a manner similar to past instances, where would price go?

Assuming diminishing marginal returns on both rallies and drawdowns, with actual prices still trading at a discount, and referencing historical retracement paths in both price and time, we have constructed potential Bitcoin price trajectories under these conditions. Each trajectory is derived from Bitcoin’s three-year price path following a specific signal in history, scaled according to cyclical return compression at varying intensities ranging from 0.33 to 0.80. The bands shown in the chart mark the boundaries of the historical distribution after intensity reduction, not the full range of potential market volatility.

The shaded bands illustrate the range of these potential outcomes.

Bitcoin Price Forecast for the Coming Years

These shaded bands represent proportionally scaled reenactments of historical paths following indicator signals. All these potential outcomes are plausible, describing possible scenarios based on historical precedent—not an exhaustive set of all conceivable outcomes—and they exclude cases where the signals failed.

While returns by the end of 2026 are expected to vary, the return distribution will clearly shift toward a positively skewed, asymmetric upward trend by 2027 and 2028. Given the current market environment and projected paths, the coming quarters may present a highly attractive opportunity for long-term Bitcoin investment.

Bitcoin Price Forecast for the Next 3 Years

Each indicator should be evaluated and weighted on its own merits. These indicators should not be interpreted as mechanistic or causal determinants of Bitcoin cycle lows, but rather as manifestations that have historically coincided with long-term cycle bottoms and exhibited corresponding characteristics.

Furthermore, the listed indicators do not constitute an exhaustive set of all possible metrics that could approximate long-term cycle price lows. The analyses presented rely on small sample sizes: the RSI moving average reflects four distinct cycles, one of which remains unresolved; the actual price study is based on four cycles, while the cycle symmetry analysis draws only from the first three completed cycles. With such limited samples, the historical expected return distribution can describe past behavior, but a divergence in even a single cycle would significantly undermine all the relationships presented.

Moreover, the signals presented should not be viewed as independent corroborating evidence. The RSI indicator, proximity to actual price levels, and position in the cycle clock largely all measure the same underlying reality: Bitcoin has experienced a significant drawdown from its peak and continues to decline. During any deep and sustained drawdown, each indicator should tend toward extremes; thus, their simultaneous occurrence is more akin to multiple measurements of the same observation rather than several independent and distinct observations.

Structural changes could cause this cycle to ultimately diverge. The current cycle is the first to feature ETF holdings, substantial corporate ownership, and more sophisticated derivatives trading—including options and perpetual futures. The four-year cycle framework may ultimately prove to be merely a description based on four data points rather than an enduring characteristic of the asset.

Finally, RSI signals are relative. Bitcoin outperforming the Nasdaq or gold could mean either that both assets are rising, or that they are falling at different rates. Even if the RSI signal favors Bitcoin, a pullback in equities or gold from their current elevated levels could still drag Bitcoin’s nominal price lower. The signals presented here offer little predictive power for price action prior to November; they merely reflect asymmetry in Bitcoin’s price trajectory over the next one to three years.

However, when considering the aforementioned indicators together, the conclusion is that Bitcoin may be at or near a cyclical low, which could form before year-end, after which an upward trend may resume.

Each signal is currently near historically rare extreme values, and previously, every such signal has preceded substantial Bitcoin gains and outperformance relative to equities over the following years. If the low has not yet occurred, the period between now and that eventual low is likely to represent a highly attractive window for long-term Bitcoin reaccumulation. These signals have remained dormant for most of history—but now, they are flashing green.

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