Author: Blockworks Research
Compile: Golem
Five historic indicators simultaneously signal a bottom for Bitcoin.
Key points summary:
Bitcoin is currently 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 the low point of its price and time cycle;
This month, Bitcoin reached a historic oversold level against the Nasdaq Index, and in February of this year, it also hit a historic oversold level against gold. Previously, data approaching these extreme levels has typically signaled the emergence of a long-cycle low, anticipating strong performance and positive returns for Bitcoin over the next 1–3 years;
The actual price of Bitcoin (i.e., the on-chain total cost of the circulating Bitcoin supply) is currently $53,000, which is 18% below the spot price. Historically, every bear market low has seen Bitcoin’s price fall below its actual price, and Bitcoin’s price has been below its actual price for only 12% of its history. Since this point, Bitcoin has delivered substantial returns over a 1- to 3-year horizon;
Historical bear market cycles typically bottom out around week 60 after the all-time high, suggesting that the low point of this bear market cycle may occur by the end of November 2026;
Overall, the convergence of various factors suggests that the period from now until December 2026 could be a highly attractive long-term opportunity to accumulate Bitcoin again.
Diminishing Returns and the Necessity of Conditional Investment
Since March 2021, the price of Bitcoin has remained stable; since November 2017, Bitcoin’s performance relative to the Nasdaq Index has also been stable, spanning nearly nine years. Over this current time frame, Bitcoin’s performance relative to stock indices has been relatively stable, yet its volatility has been significantly higher than that of stock indices. After adjusting for risk, Bitcoin’s performance has underperformed compared to stock indices.
This context is crucial for understanding how to hold Bitcoin. As the price of Bitcoin rises and falls, its marginal returns are diminishing. The passive, always-long strategy that has consistently delivered returns to holders over past cycles is now proving ineffective; therefore, achieving excess returns increasingly requires seizing opportunities to strategically buy or sell Bitcoin.
To identify these opportunity windows, the indicators proposed in this article are conditional signals that remain in a "silent state" for most of historical time, 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 the low point of its long-term cycle.
Indicator 1: 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.
An increasing RSI indicates that the Nasdaq index is overbought relative to Bitcoin; a decreasing RSI indicates the opposite. This indicator is not a day-trading tool—it is a 14-week moving average of a 14-week oscillator, with transitions between overbought and oversold states occurring over multi-year market cycles, not days or weeks.
Nasdaq/BTC RSI
Nasdaq relative overbought conditions are a rare occurrence. The RSI moving average has been above 65 for only 5.78% of its historical data and above 70 for just 0.35% of the time. These thresholds have been 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 value needs to be analyzed from three aspects:
First, the current level of 72.6 is at a historical high, 4.1 points above the previous high of 68.5 set in September 2022, and all observations above 70 have occurred within the past month;
Second, this current cycle has lasted 24 weeks, setting a new historical record, far exceeding the 11 weeks in 2015, 4 weeks in 2019, and 10 weeks in 2022;
Third, this situation has occurred only four times in the past 16 years, making it one of the rarest phenomena for this indicator. Measured this way, it represents the most overbought condition ever seen for the Nasdaq Index against Bitcoin—in other words, since this currency pair and its RSI can display inversely, from a longer time frame perspective, it is the most oversold condition ever seen for Bitcoin against the Nasdaq Index.
Indicator 2: Long-term Expected Return
Marked by each Nasdaq/BTC RSI reading above 66, the expected return curves for BTC/USD and BTC/NAS100 have shown upward asymmetry in all three observed cycles, but only over longer time horizons.
Comparison of expected return curves for BTC/USD and BTC/NAS100
Nasdaq/BTC RSI Expected Return
This table has two important features:
First, consider the time horizon. Short-term expected returns have almost no reference value, as returns over 30–120 days are minimal and inconsistent—for example, Bitcoin held in 2022 fell 29.1% over 120 days but rebounded 397% three years later. Relative strength signals offer little indication for price movements over the next one to three years.
Second is the decay in return magnitude. The three-year Bitcoin return in each cycle is approximately one-quarter to one-third of the previous cycle, consistent with the law of diminishing marginal returns discussed above. In all observations, Bitcoin significantly outperformed the Nasdaq Index over the subsequent three years.
Indicator 3: Gold/Bitcoin Relative Strength Signal
If the Nasdaq Index represents Bitcoin's status as a risk asset, then gold represents its status as a store of monetary value.
When constructing a similar metric on the gold/bitcoin ratio, we observe comparable data: values above 66 are rare, exhibit mean-reversion properties, and cluster near extreme levels. According to this metric, February 2026 was the most overbought period in the history of the gold/bitcoin ratio.
Gold/BTC RSI
The rise in the RSI reading for this trading pair coincides with Bitcoin’s long-cycle price low, demonstrating a typical pattern. The expected return curve for this indicator is similar to the Nasdaq analysis mentioned above; over a 1- to 3-year horizon, Bitcoin’s historical performance has outperformed gold and the dollar following such extreme RSI readings.
Comparison of expected return curves for BTC/USD and XAU/BTC
Metric 4: Bitcoin's Actual Price (On-Chain Cost Basis)
The real price estimates the total on-chain cost basis of all circulating bitcoins. Unlike the spot price, which reflects Bitcoin’s current market value, the real price measures the average price at which the existing supply was last transferred on-chain, thereby estimating the on-chain cost. Historically, the real price represents Bitcoin’s intrinsic value.
On-chain actual price of Bitcoin
The actual price is a reference standard, not a floor. Currently, the actual price of Bitcoin is $53,000, which is 18% lower than the spot price; historically, the spot price has been below the actual price only 12% of the time.
Similar to the RSI indicator mentioned above, this is a cycle-tail signal. Historically, every bear market low in Bitcoin spot price has been lower than the actual price, and after entering this zone, prices have typically continued to decline before reaching a bottom. Therefore, falling to or below $53,000 aligns with historical patterns rather than contradicting them.
Since entering this region, the expected returns have been consistently substantial over the long term.
Price movement after the Bitcoin spot price falls below the actual price
Starting from the first weekly closing price below the actual price in each cycle, historical data shows that prices experienced significant positive returns over the subsequent 150 weeks. The magnitude of these figures declines across cycles, consistent with the decay trend of the RSI indicator, but the direction remains aligned.
Historically, Bitcoin's first closing price below its actual price marked the end stage of a bear market, not the beginning or middle. Nevertheless, the multiple of Bitcoin's spot price relative to its actual price has declined significantly from its previous high of 2025, indicating reduced market risk.
Indicator 5: Cycle Clock
The last indicator is the most concise, showing the historical structure of Bitcoin bear markets measured by price and time.
Duration of the Bitcoin bear market
In the cycles of 2013, 2017, and 2021, Bitcoin’s price lows typically occurred at week 60 after the all-time high. The current cycle is at week 40 with a 50% drawdown, largely consistent with the patterns of the previous three cycles. If this historical pattern holds, Bitcoin’s low is expected to form by late November 2026.
Although the RSI levels for the Nasdaq 100/BTC and Gold/BTC pairs have shown extremes, this cycle's pullback remains consistent with historical retracement patterns.
The time dimension has also compressed the intervals between cycles, with each cycle returning to a new all-time high in progressively shorter periods. In other words, the time required to retrace to the previous high is shorter than in the prior cycle. Assuming this trend continues, the next all-time high should appear within 120 weeks after the previous high, meaning a new high will occur before February 2028.
These two observations themselves do not contain any mechanism; they are merely empirical patterns observed over a few cycles. They serve as time anchors,叠加在上述基于条件的信号之上, limiting the remaining downside potential for Bitcoin. If historical structure holds, Bitcoin may be approximately 20 weeks away from its low point—or may have already bottomed out.
Bitcoin price future outlook
Given the current situation, the following scenario combinations, combining the background and historical outcomes described above, illustrate a range of possible paths for Bitcoin over the next three years. This is not a prediction or assertion of potential outcomes, but rather an attempt to answer the question: If the resolution of the current situation mirrors that of past similar situations, where might the price head?
Assuming diminishing marginal returns on both upward and downward movements, with the actual price still trading at a discount, and referencing historical retracement paths in price and time, we constructed possible Bitcoin price trajectories under these conditions. Each possibility is derived from Bitcoin’s three-year price movement following a specific signal, scaled with cyclical return compression at intensities ranging from 0.33 to 0.80. The ranges shown in the chart represent the boundaries of historical distributions after applying reduced intensity, not the potential limits of market volatility.
The shaded area shows the range of these possibilities.
Bitcoin future price trend prediction
These shaded bands are scaled reproductions of the paths taken after historical indicator signals were issued; all of these possible outcomes are satisfactory, as they describe potential scenarios of historical recurrence, not all possible outcomes, and do not include failed signal scenarios.
Although returns are expected to vary through the end of 2026, by 2027 and 2028, the distribution of returns is projected to shift明显 toward a positive and asymmetric upward trend. Given the current market environment and projected trajectory, the coming quarters may present a highly attractive opportunity for long-term Bitcoin investment.
Bitcoin price prediction for the next 3 years
Risks and Limitations
Each metric should be evaluated and weighed based on its own merit. These metrics should not be interpreted as mechanisms or causal factors behind Bitcoin cycle lows, but rather as indicators that coincide with and exhibit the characteristics of historically observed long-term cycle lows.
In addition, the listed indicators are not all the indicators available to approximate long-cycle price lows. The sample size used in this analysis is small: the RSI moving average shows four independent cycles with valid samples, one of which remains undetermined; actual price analysis is based on four cycles, while cycle symmetry analysis is based on the first three completed cycles. Under such a limited sample size, historical expected return distributions can describe past trends, but a single cycle divergence could significantly weaken all observed relationships.
In addition, the signals presented should not be viewed as independent corroborations. The RSI indicator, proximity to actual price, and cycle clock position largely measure the same fact: Bitcoin has experienced a significant pullback and continued decline from its highs. In any deep, sustained pullback, each indicator should trend toward extremes; therefore, their simultaneous occurrence resembles multiple measurements of the same observation rather than multiple independent and distinct observations.
Structural changes may cause this cycle to ultimately diverge. This cycle is the first to feature ETF holdings, significant corporate ownership, and more complex derivatives trading such as options and perpetual futures. The four-year cycle framework may ultimately prove to be merely a description of four observations rather than a persistent characteristic of the asset.
Finally, RSI indicator signals are relative. Bitcoin outperforming the Nasdaq or gold could mean both assets are rising, or that they are declining at different rates. Even if RSI signals favor Bitcoin, if stock markets or gold prices pull back from their current highs, Bitcoin’s nominal price could also be pulled down. The signals presented here have little predictive power for movements before November and merely reflect asymmetries in price trends over the next 1–3 years.
Conclusion
However, when considering the above indicators, our conclusion is that Bitcoin may be at or near the cycle low, which could form by the end of the year, followed by a resumption of the upward trend.
Each signal appears near its historically rare extreme values, and in the past, each has preceded significant Bitcoin gains over the following years, outperforming stocks. If the bottom has not yet been reached, the period from now until the bottom is likely a highly attractive long-term opportunity to accumulate Bitcoin again. These signals have remained silent for most of history, but now they are giving a “green light.”
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