Bitcoin cycle momentum flips positive after 8-month bearish run

Bitcoin's Cycle Momentum indicator turned positive for the first time in eight months, a CryptoQuant on-chain signal that historically has marked the end of prolonged bear markets.

"To confirm the reversal, the indicator needs to continue moving higher and reach the 20-30 level in the coming weeks," CryptoQuant analysts wrote in a Sept. 2 quicktake, cautioning that the current market structure remains mixed.

The flip follows Bitcoin's surge from $62,000 to $81,000 in August, which pulled the market out of a months-long slump. Wallets holding at least 100 BTC added roughly 60,000 coins during the month, while investors holding less than 100 BTC sold a combined 47,000, according to CryptoQuant data. U.S. spot Bitcoin ETFs recorded their strongest weekly inflows in 10 months, and more than $470 million in USDC flowed into major exchanges.

The signal challenges the view that institutional inflows had rendered Bitcoin's four-year cycle obsolete. Skeptics who argued that ETF-era capital had flattened the halving-driven rhythm have been shown wrong on this reading, and cycle-following traders are returning to the market.

STH Profit-Taking Pressures the Rally

Short-term holders complicate the picture. Analyst Darkfost flagged that this group realized average profits of up to 15 percent in August — above the roughly 11 percent seen during the all-time high — the highest level since October 2025. That profit-taking adds sell-side pressure that must be absorbed by fresh demand.

Apparent demand, meanwhile, has deteriorated. The metric moved back into negative territory over recent days, Darkfost said, warning that without a rebound Bitcoin could enter a new leg down.

Large holders, by contrast, are leaning into the recovery. Rather than selling, some have used their Bitcoin as collateral for loans to ride out the downturn, with the volume of such borrowing among big investors rising 18 percent on specialized platforms, per CryptoQuant.

Support and the Confirmation Window

Bitcoin traded near $77,341 at the time of writing, down 1.9 percent over 24 hours, after closing August at $78,581 on Binance. The key support zone sits around $69,000, the average price at which short-term investors bought their coins. If that level holds, a return to the broader bullish trend would be a matter of time, analysts said.

The confirmation window is the coming weeks. If the Cycle Momentum indicator reaches 20-30 and apparent demand recovers, the bear-market reversal would be validated; if demand keeps sliding, the positive flip risks proving a false dawn.

This article is for informational purposes only and does not constitute investment advice.