Original:Blockworks Research
Translation: Odaily Planet Daily Golem
Key Summary:
- Bitcoin is currently down 50% from its all-time high, the bear market has lasted over 40 weeks. A series of long-term cycle indicators suggest the market may be at or near price and time cycle lows.
- This month, Bitcoin hit its most oversold level ever against the Nasdaq index, and in February this year, it also reached its most oversold level ever against gold. Approaching these extreme levels historically has typically signaled long-term cycle lows and presaged Bitcoin's outperformance and positive returns over the next 1-3 years.
- Bitcoin's Realized Price (the total on-chain cost basis of the circulating Bitcoin supply) is currently $53,000, 18% below the spot price. Historically, every bear market low has seen Bitcoin price below the Realized Price. Bitcoin price has only spent 12% of its history below the Realized Price. Starting from such time points, Bitcoin has delivered considerable 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 form in late November 2026.
- Taken together, the current confluence of factors suggests the period from now until December 2026 may be an extremely attractive time for long-term Bitcoin reaccumulation.
Diminishing Returns and the Need for Conditional Investing
Since March 2021, Bitcoin's price has remained flat; since November 2017, Bitcoin has remained flat against the Nasdaq index for nearly nine years. Over these timespans, Bitcoin's performance relative to equity indices has been flat, while its volatility has been significantly higher. On a risk-adjusted basis, Bitcoin has underperformed equity indices.
This context is crucial for how Bitcoin is held. As Bitcoin rallies and declines, its marginal gains diminish. The passive, always-long strategy that worked for holders across past cycles is now failing. Thus, achieving outperformance increasingly requires seizing opportunities to time additions to, or reductions from, Bitcoin holdings.
To locate these windows, the indicators presented here are conditional signals. They lie dormant for most of history, with their strongest signals occurring in the tails, only a few times per decade.
Presently, these signals have fired simultaneously, and all point to the same conclusion: Bitcoin is likely at or near the price low of its long-term cycle.
Indicator One: Nasdaq/Bitcoin Relative Strength Signal
The first signal is constructed on the Nasdaq 100 index to Bitcoin ratio, based on weekly closes over the last 875 periods. We calculate a 14-period Relative Strength Index (RSI) for this ratio, smoothed with a 14-period Simple Moving Average.
A rising RSI indicates the Nasdaq is overbought relative to Bitcoin; a declining RSI indicates the opposite. This is not an intraday trading indicator. It is the 14-week moving average of a 14-week oscillator, with overbought and oversold regimes lasting multi-year market cycles, not days or weeks.
Nasdaq/BTC RSI
Nasdaq overboughtness is a rare event. The RSI moving average has only spent 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 persisting to the present.
The current reading must be analyzed in three ways:
- First, the current 72.6 level is an all-time high, exceeding the previous peak of 68.5 in September 2022 by 4.1 points. All readings above 70 have occurred in the last 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, this has only occurred four times in the last 16 years; the present situation is among the rarest phenomena of this indicator. By this measure, this is the most overbought the Nasdaq has ever been relative to Bitcoin, or, inversely, viewed over longer timeframes, this is the most oversold Bitcoin has ever been relative to the Nasdaq.
Indicator Two: Long-Term Forward Returns
Marked by each instance where the Nasdaq/Bitcoin RSI exceeded 66, the forward return profiles for both BTC/USD and BTC/NAS100 in the three historical episodes show upward asymmetry, but only over longer horizons.
BTC/USD and BTC/NAS100 Forward Return Profiles Comparison
Nasdaq/BTC RSI Forward Returns
Two important properties of this table stand out:
- The first is the time horizon. Short-term forward returns carry almost no information, as the magnitude and direction are minor and inconsistent over 30-120 days, e.g., Bitcoin holdings in 2022 were down 29.1% after 120 days but up 397% after three years. The relative strength signal is largely uninformative for the next one to three months.
- The second is the decay in return magnitude. Three-year Bitcoin returns in each cycle are about one-quarter to one-third of the prior cycle's, consistent with the diminishing marginal returns discussed above. In all observations, Bitcoin meaningfully outperformed the Nasdaq over the subsequent three years.
Indicator Three: Gold/Bitcoin Relative Strength Signal
If the Nasdaq represents Bitcoin's status as a risk asset, gold represents its status as a monetary store of value.
Constructing a similar metric on the Gold/Bitcoin ratio, we observe a similar dataset, with readings above 66 being rare, exhibiting mean-reverting properties, and clustered around extremes. By this measure, February 2026 was the most overbought period in Gold/Bitcoin history.
Gold/Bitcoin RSI
Peak RSI readings in this pair coincide with long-term cycle price lows for Bitcoin, demonstrating a typical profile. The forward return profile of this indicator is analogous to the Nasdaq findings studied above: over 1-3 year horizons, Bitcoin has historically outperformed both gold and the US dollar from such extreme RSI readings.
BTC/USD and XAU/BTC Forward Return Profiles Comparison
Indicator Four: Bitcoin Realized Price (On-Chain Cost Basis)
Bitcoin's Realized Price estimates the total on-chain cost basis of all Bitcoin in circulation. Unlike spot price, which reflects Bitcoin's current market value, Realized Price measures the average price at which the existing supply last moved on-chain, thus estimating the on-chain cost basis. Historically, Realized Price has represented a deeper valuation level for Bitcoin.
Bitcoin On-Chain Realized Price
Realized Price is a reference level, not a floor. Currently, Bitcoin's Realized Price is $53,000, 18% below the spot price. Bitcoin spot price has only spent 12% of its history below the Realized Price.
Like the RSI indicators above, this is a tail-of-cycle signal. Historically, every bear market low in Bitcoin spot price has occurred below the Realized Price, and historically, after entering this zone, price typically declines further before bottoming. Thus, a decline to or below $53,000 would be consistent with history, not contrary to it.
From entry into this zone, forward returns have historically been positive and sizable.
Bitcoin Price Trajectory After Spot Price Falls Below Realized Price
Measuring from the first weekly close below Realized Price in each cycle, the historical data shows pronounced positive performance over the next 150 weeks. The magnitudes of these numbers decline each cycle, aligning with the decay trend seen in RSI metrics, but the direction is consistent.
Historically, Bitcoin's first close below Realized Price has marked the terminal phase of bear markets, not their onset or middle. Nonetheless, the spot-to-realized price multiple has collapsed from previous highs of over 20x, indicating reduced market froth.
Indicator Five: The Cycle Clock
The final indicator is the most straightforward, illustrating 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 occurred around week 60 after the all-time high. The current cycle is in week 40, with a drawdown of 50%, broadly tracking the first three cycles. If the week 60 pattern holds, a Bitcoin low would form in late November 2026.
Despite the Nasdaq 100/Bitcoin and Gold/Bitcoin RSI readings showing extremes, the drawdown this cycle remains consistent with historical drawdown paths.
The time dimension also compresses the intervals between cycles, with each cycle falling back to a new all-time high in progressively shorter timeframes. In other words, the time required to return to the prior all-time high is shorter than in the previous cycle. Assuming this trend continues, a new all-time high should occur within 120 weeks of the prior one, implying a new high by February 2028.
These two observations themselves contain no mechanism; they are empirical regularities across a few cycles. They act as time anchors, layered on top of the conditional signals above, to bound Bitcoin's remaining downside. If the historical structure holds, Bitcoin is roughly 20 weeks from its low, or may have already bottomed.
The Path Forward for Bitcoin Price
Given the current context, the following composite scenario combines the backdrop and historical outcomes outlined above to paint a range of potential paths for Bitcoin over the next three years. This is not a forecast or assertion of likely outcomes, but aims to answer: if the present situation resolves similarly to past analogous situations, where would price go?
Assuming diminishing marginal gains on both up and down moves, a discount to realized price, and referencing historical drawdown paths in both price and time, we construct Bitcoin price path possibilities under these conditions. Each possibility is drawn from Bitcoin's three-year trajectory following a signal firing, scaled by varying intensities from 0.33 to 0.80 to account for cyclical return compression. The bands mark the scaled-down bounds of the historical distribution, not the range within which markets are likely to move.
The shaded bands show the range of these possibilities.
Bitcoin Forward Price Path Projection
These bands are scaled recreations of the historical paths following indicator signals. All these outcomes are satisfactory; they describe plausible scenarios of history repeating, not all possible outcomes, and exclude the possibility of signal failure.
While returns are expected to be mixed by the end of 2026, by 2027 and 2028, the return distribution clearly shifts toward a positively skewed and upward asymmetric trajectory. Given the current market environment and projected path, the coming quarters may present an exceptionally attractive opportunity for long-term investment in Bitcoin.
Bitcoin Price Projection for the Next 3 Years
Risks and Limitations
Each indicator should be evaluated and weighted on its own merits. These indicators should not be interpreted as mechanisms or causal factors for Bitcoin cycle lows, but as manifestations that have coincided with and share characteristics of historically observed long-term cycle lows.
Furthermore, the listed indicators are not exhaustive of all metrics that can approximate long-term cycle price lows. The sample sizes underlying these analyses are small. The RSI moving average shows effective samples of four distinct cycles, one of which is not yet resolved; realized price studies are based on four cycles; and cycle symmetry is based on the first three completed cycles. With such small samples, historical forward return distributions can describe historical trajectories, but a single cycle of deviation will meaningfully weaken all presented relationships.
Additionally, the presented signals should not be considered independent corroborations. RSI readings, proximity to realized price, and cycle clock position are largely measures of the same fact: Bitcoin has undergone a significant, sustained drawdown from highs. In any deep, sustained drawdown, each indicator should trend toward extremes, so their co-occurrence is more a measurement of a single observation in multiple ways than multiple independent and unique observations.
Structural changes may result in this cycle diverging. The current cycle is the first featuring ETF adoption, significant corporate holdings, and more complex derivative trading via options and perpetual futures. The four-year cycle framework may ultimately prove to be a description of four observations, not a persistent feature of the asset.
Finally, the RSI signals are relative. Bitcoin outperforming the Nasdaq or gold can occur as both assets rise or as both fall at different rates. Bitcoin's nominal price could be dragged lower if equities or gold correct from current highs, even if RSI signals are favorable for Bitcoin. The signals presented here have little predictive power for moves before November, reflecting only the asymmetry of forward price moves over 1-3 years.
Conclusion
Nevertheless, considering the indicators above, the conclusion drawn is that Bitcoin is likely at or near a cycle low that may form before year-end, after which an uptrend may resume.
Each signal is firing near extreme levels rare in its history, and previously, each has presaged meaningful outperformance and positive returns for Bitcoin over the next several years against equities. If the low is not yet in, the period between now and that low likely presents an extremely attractive long-term range for Bitcoin reaccumulation. These signals lie dormant for most of history; they are now flashing 'green.'
