He stressed that while price confirmation is still needed, the on-chain data
On August 25, CryptoQuant CEO Ki Young Ju announced that the Bitcoin bear market has ended, citing a proprietary on-chain profitability index that recently crossed a critical threshold. This signal matches the one observed in January 2023, which preceded Bitcoin’s rise from $16,000 to nearly $73,000 later that year. Ju shared the assessment publicly, emphasizing that the metric reflects improving fundamentals among long-term holders. The profitability index used by CryptoQuant measures the ratio of Bitcoin in profit versus loss across wallets, offering insight into market sentiment beyond price action. When this metric turns positive after prolonged downturns, it has historically coincided with accumulation phases and trend reversals. Ju noted that current readings resemble those seen during the 2023 recovery, suggesting a similar shift in investor behavior may be underway.
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Solana Defends Rising Trendline With $115 Target in SightHe stressed that while price confirmation is still needed, the on-chain data points to a change in market structure. What Does the Profitability Signal Indicate About Holder Behavior? The index tracks whether more Bitcoin is held at a profit than at a loss, serving as a gauge of market stress and confidence. A sustained move into profitability often reflects reduced selling pressure and increased conviction among holders. In past cycles, this shift has preceded major rallies by several months, as weak hands exit and long-term accumulation resumes. Ju highlighted that the current reading is not a fleeting spike but a sustained break above the neutral level, similar to January 2023.
He added that macro factors and exchange flows should still be monitored for
He added that macro factors and exchange flows should still be monitored for confirmation. Could This Signal Lead to Another Major Rally Like in 2023? While historical patterns suggest potential for significant upside, Ju cautioned that past performance does not guarantee future results. The 2023 rally was driven by a combination of improving on-chain metrics, declining exchange reserves, and renewed institutional interest. Current conditions show some parallels, including declining short-term holder supply and rising whale activity. However, broader economic factors such as interest rates and regulatory developments remain influential. Ju emphasized that the signal is a starting point for optimism, not a prediction of specific price levels. Frequently Asked Questions What is CryptoQuant’s profitability index and how is it calculated? It estimates the percentage of Bitcoin supply held at a profit versus loss by analyzing the realized price of moved coins compared to their current value.
A reading above 50% indicates more coins are in profit than in loss. Why does this index matter for determining market cycles? It reflects underlying holder sentiment and can signal when capitulation ends and accumulation begins, often preceding price reversals by weeks or months. Does this mean Bitcoin will definitely rise soon? No, the signal suggests improving conditions but does not guarantee immediate price growth; other market factors must align for a sustained rally to develop.
