Bitcoin Cycle Indicator Turns Green For First Time In Years: Early Bull Or Local Top?
12 May 2026 · 23:30 UTC · NewsBTC RSS Feed · Original source
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Summary
CryptoQuant's Bitcoin Bull-Bear Market Cycle Indicator has shifted to green, signaling an "Early Bull" phase for the first time since March 2023. The indicator measures Bitcoin's market cycle phase based on the P&L Index and its 365-day moving average interaction. Following a drop to extreme bearish levels in February 2026 coinciding with a price crash, the indicator remained in bear territory throughout March and April as Bitcoin recovered. The most recent May rally pushed the indicator into green territory. Historically, this phase appeared in 2019 and 2023 before subsequent bull markets, though a false signal in March 2022 preceded continued decline instead. Bitcoin is currently trading near $80,700. The article emphasizes ongoing ambiguity regarding whether this signal represents the beginning of a new bull market or merely a local top before further decline, leaving the true implications uncertain.
Why it matters
CryptoQuant's indicator combines on-chain metrics via the P&L Index, which tracks profitability and loss positions across the network. The green signal indicates the P&L Index has risen above its 365-day moving average, suggesting diminished profit-taking and emerging accumulation dynamics. Impact mechanisms operate through trader recognition and positioning adjustments, typically materializing over days to weeks rather than minutes. The indicator's predictive power historically shows moderate success but is not infallible, as demonstrated by the 2022 false signal. Key uncertainties include the persistence of on-chain patterns in volatile markets, macroeconomic shocks, regulatory announcements, geopolitical events, and large-scale institutional capital flows that can overwhelm technical signals. Confidence in this indicator should be tempered by combining with complementary analysis methods and monitoring broader market context.
Expected impact
The green signal from CryptoQuant's Bull-Bear Cycle Indicator suggests Bitcoin may be entering an early bull phase, with historical precedent in 2019 and 2023 showing similar signals preceded sustained rallies. However, a March 2022 false signal that preceded continued decline highlights the indicator's limitations. Short-term impact (minutes to hours) remains minimal, as ultra-short-term traders typically don't heavily weight single technical indicators. Daily to weekly timeframes present stronger potential for market impact as momentum traders and institutional participants may adopt bullish positioning based on this signal. Altcoins would amplify Bitcoin's movements with elevated volatility. The signal's ultimate market impact depends critically on whether broader macroeconomic conditions, regulatory developments, and capital flows align with or contradict this bullish technical narrative.