Original Source: Blockworks Research
Compiled / Odaily Planet Daily Golem(@web 3_golem)
Key Takeaways:
- Bitcoin's current price is down 50% from its all-time high, and the bear market has lasted over 40 weeks. A series of long-term cycle indicators suggest the market may be at or near a price and time cycle low point.
- This month, Bitcoin versus the Nasdaq index reached its most oversold level in history; it also reached its most oversold level versus gold in February this year. Previous approaches to these extreme levels have typically signaled the emergence of long-term cycle lows and predicted Bitcoin's outperformance and positive returns over the next 1-3 years.
- Bitcoin's Realized Price (the on-chain aggregate cost basis of the circulating supply) is currently $53,000, 18% below the spot price. Historically, every bear market low for Bitcoin has been below the Realized Price. Bitcoin's price has spent only 12% of its history below the Realized Price. Starting from such time points, Bitcoin has delivered substantial returns over 1-3 year timeframes.
- Historical bear market cycles have typically bottomed around week 60 after the all-time high, suggesting the low for this cycle may occur around late November 2026.
- Collectively, the convergence of various factors indicates that the period from now until December 2026 may present a highly attractive opportunity for long-term Bitcoin re-accumulation.
The Necessity of Diminishing Returns and Conditional Investment
Since March 2021, Bitcoin's price has remained flat; since November 2017, Bitcoin has also been flat against the Nasdaq index, spanning nearly nine years. Over this current timeframe, Bitcoin's performance relative to the stock index has been quite flat, yet its volatility is significantly higher. On a risk-adjusted basis, Bitcoin has underperformed the stock index.
This context is crucial for how one holds Bitcoin. As Bitcoin's price appreciates and depreciates, its marginal returns will diminish. The passive, always-long strategy that worked in previous cycles appears to be faltering now. Therefore, achieving superior returns increasingly requires timing the market by accumulating or reducing Bitcoin holdings during specific windows.
To identify these opportunity windows, the indicators presented in this article are conditional signals. They are dormant for most of history, with their strongest signals appearing in the tails, occurring only a few times per decade.
Currently, these signals have appeared simultaneously and all point to the same conclusion: Bitcoin may be at or near a long-term cycle price low.
Indicator One: Nasdaq/Bitcoin Relative Strength Signal
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 the 14-period Relative Strength Index (RSI) of this ratio and smooth it using a 14-period Simple Moving Average.
A rising RSI indicates Nasdaq is overbought relative to Bitcoin; a falling RSI indicates the opposite. This is not an intraday trading technical indicator; it is a 14-week moving average of a 14-week oscillator, with its overbought and oversold state transitions spanning multi-year market cycles, not days or weeks.
Nasdaq/BTC RSI
Relative overboughtness for the Nasdaq is a rare event. The RSI moving average has spent only 5.78% of its history above 65 and only 0.35% above 70. These thresholds have only been breached in four periods: February 2015, February 2019, August 2022, and the period beginning in late January 2026 and continuing to the present.
The current value needs to be analyzed in three aspects:
- First, the current level of 72.6 is at a historical peak, 4.1 points higher than the previous high of 68.5 set in September 2022. All observations above 70 have occurred within the past month.
- Second, this current episode has lasted 24 weeks, a record duration, far exceeding the 11 weeks in 2015, 4 weeks in 2019, and 10 weeks in 2022.
- Third, it has only occurred four times in the past 16 years. The current situation is one of the rarest phenomena for this indicator. By this measure, this is the most severe overbought condition for Nasdaq versus Bitcoin in history, or conversely, since the currency pair and its RSI can be viewed inversely, it is the most severe oversold condition for Bitcoin versus the Nasdaq on a longer timeframe.
Indicator Two: Long-Term Expected Returns
Marking each of the three previous cycles where the Nasdaq/Bitcoin RSI indicator crossed above 66, the forward return curves for both BTC/USD and BTC/NAS100 show upward asymmetry, but only over longer timeframes.
Comparison of Forward Return Curves for BTC/USD and BTC/NAS100
Nasdaq/BTC RSI Forward Returns
This table has two important characteristics:
- First is the time horizon. Short-term forward returns offer little guidance, as 30-120 day returns are smaller and directionally mixed. For example, Bitcoin holdings from 2022 declined 29.1% over 120 days but rebounded 397% three years later. The relative strength signal is largely uninformative for the direction over the next one to three months.
- Second is the decay in return magnitude. The three-year Bitcoin return in each subsequent cycle is about one-quarter to one-third of the previous cycle's, consistent with the law of diminishing marginal returns discussed earlier. In all observations, Bitcoin significantly outperformed the Nasdaq over the next three years.
Indicator Three: Gold/Bitcoin Relative Strength Signal
If the Nasdaq represents Bitcoin's status as a risk asset, then gold represents its status as a monetary store of value.
Constructing a similar indicator on the Gold/Bitcoin ratio, we observe similar data: readings above 66 are rare, exhibit mean-reverting properties, and cluster around extremes. According to this metric, February 2026 was the most overbought period in Gold/Bitcoin history.
Gold/Bitcoin RSI
Elevated RSI readings for this pair coincide with long-term cycle price lows for Bitcoin, demonstrating typical characteristics. The forward return curve for this indicator resembles the Nasdaq results studied above. Over 1-3 year timeframes, from points where the RSI data was this extreme, Bitcoin historically outperformed both gold and the US dollar.
Comparison of Forward Return Curves for BTC/USD and XAU/BTC
Indicator Four: Bitcoin Realized Price (On-Chain Cost Basis)
Bitcoin's Realized Price estimates the aggregate on-chain cost basis for all circulating Bitcoin. Unlike spot price, which reflects Bitcoin's current market value, the Realized Price measures the average price at which the existing supply last moved on-chain, thus estimating the on-chain cost basis. Historically, the Realized Price represents a deep value for Bitcoin.
Bitcoin On-Chain Realized Price
The Realized Price serves as a reference point, not a floor. Currently, the Bitcoin Realized Price is $53,000, 18% below the spot price. Bitcoin's spot price has spent only 12% of its history below the Realized Price.
Similar to the RSI indicators mentioned above, this situation is a tail-of-cycle signal. Every historical bear market low for Bitcoin's spot price has been below the Realized Price, and historically, after entering this zone, the price typically declines further before bottoming. Therefore, a drop to or below $53,000 aligns with historical patterns, rather than contradicting them.
Starting from the point of entering this zone, forward returns over longer horizons have been substantial.
Bitcoin Price Performance After Spot Price Falls Below Realized Price
Calculating from the first weekly close below the Realized Price in each cycle, historical data shows significantly positive returns over the subsequent 150 weeks. The magnitudes of these returns have declined each cycle, aligning with the decay trend seen in the RSI indicators, but the direction remains consistent.
Historically, Bitcoin's first close below the Realized Price marks the final stage of a bear market, not its beginning or middle. Nonetheless, the multiple of Bitcoin's spot price to its Realized Price has significantly retreated from prior cycle highs above 2x, indicating reduced market risk.
Indicator Five: Cycle Clock
The final indicator is the most straightforward. It illustrates the historical structure of Bitcoin bear markets, measured in both price and time.
Bitcoin Bear Market Duration
In the 2013, 2017, and 2021 cycles, Bitcoin price lows typically formed around week 60 following the all-time high. The current cycle is at week 40, with a 50% drawdown, largely consistent with the trajectory of the previous three cycles. If the week 60 pattern holds, a Bitcoin low would form around late November 2026.
Despite the extreme readings from the Nasdaq 100/Bitcoin and Gold/Bitcoin RSI indicators, the drawdown in this cycle remains consistent with historical drawdown paths.
The time dimension also compresses the intervals between cycles. Each cycle retraces to new all-time highs in increasingly shorter times. In other words, the time required to return to the previous all-time high is shorter than in the last cycle. Assuming this trend continues, a new all-time high should appear within 120 weeks of the prior peak, implying a new high before February 2028.
These two observations themselves contain no mechanism; they are empirical regularities across a handful of cycles. They serve as temporal anchors, layered on top of the conditional signals above, constraining Bitcoin's remaining downside. If historical structure holds, Bitcoin is approximately 20 weeks from its low, or may have already bottomed.
Potential Future Paths for Bitcoin Price
Given the current circumstances, the following scenario set combines the context and historical outcomes described earlier to outline a range of possible paths for Bitcoin over the next three years. This is not a prediction or assertion of likely outcomes, but rather aims to answer a question: If the current situation resolves in a manner similar to past similar situations, where might the price go?
Assuming diminishing marginal returns on the upside and downside, the discount to the Realized Price, and referencing historical drawdown paths in both price and time, we construct possible Bitcoin price trajectories under these conditions. Each possibility is drawn from Bitcoin's three-year path following the appearance of a past signal and scaled with different intensities from 0.33 to 0.80 based on cyclical return compression. The bands in the chart mark the boundaries of these scaled historical distributions, not bounds on possible market fluctuations.
The shaded bands show the range of these possibilities.
Bitcoin Future Price Path Projection
These shaded bands are proportionally scaled recreations of historical paths following indicator signals. All these possible outcomes are satisfying; they describe possible scenarios if history rhymes, not all possible outcomes, and they do not include scenarios where signals fail.
While returns by the end of 2026 are expected to be mixed, by 2027 and 2028, the return distribution clearly shifts towards positive and asymmetrically upward. Given the current market environment and projected paths, the coming quarters may present a highly attractive opportunity for long-term investment in Bitcoin.
Bitcoin Price Forecast for the Next 3 Years
Risks and Limitations
Each indicator should be evaluated and weighed on its own merits. These indicators should not be interpreted as mechanisms and causal drivers of Bitcoin's cycle lows, but rather as manifestations coinciding with and possessing the characteristics of historically observed long-term cycle lows.
Furthermore, the listed indicators are not all that could be used to approximate long-term cycle price lows. The analyses are based on small sample sizes. The RSI moving average shows effective samples from four separate cycles, one of which is not yet determined; the Realized Price study is based on four cycles; and the cycle symmetry analysis is based on the first three completed cycles. With such small sample sizes, historical forward return distributions can describe past behavior, but a deviation in one cycle would significantly weaken all presented relationships.
Additionally, the presented signals should not be viewed as independent corroborations. The RSI indicators, proximity to the Realized Price, and the position on the cycle clock are, to a large degree, measuring the same fact: Bitcoin has experienced a deep, sustained drawdown from its highs. In any deep, prolonged drawdown, each indicator should tend towards extremes. Therefore, their simultaneous appearance is more like multiple measurements of the same observation rather than multiple independent and unique observations.
Structural changes could cause this cycle to ultimately diverge. The current cycle is the first with ETF holdings, significant corporate holdings, and more complex derivative trading like options and perpetual futures. The four-year cycle framework may ultimately prove to be merely a description of four observations, not a persistent feature of the asset.
Finally, RSI indicator signals are relative. Bitcoin outperforming the Nasdaq or gold could mean both assets are rising, or that both are falling at different rates. Even if RSI signals are favorable for Bitcoin, Bitcoin's nominal price could be dragged down if equity or gold prices retreat from current highs. The signals presented here offer little predictive power for movements before November, only reflecting the asymmetry in price movements over the next 1-3 years.
Conclusion
Yet, considering the indicators above, the conclusion reached is that Bitcoin may be at or near a cycle low, which could form before year-end, after which an upward trend resumes.
Each signal is present near historically rare extremes, and each has historically preceded substantial returns for Bitcoin and outperformance versus equities over the subsequent years. If the low is not yet in, the period between now and that low is likely a highly attractive range for long-term Bitcoin re-accumulation. These signals are dormant for most of history, but they are now flashing "green light" signals.
