Six on-chain indicators hit cycle-bottom levels for Bitcoin
Six on-chain indicators – Mayer Z-score ~ -1.5, Sharpe Ratio in low-risk band, 200-week MA held, ~39% of supply at a loss; long-term holders retain over 14.5M BTC.
Six on-chain metrics reached levels associated with past cycle bottoms while Bitcoin price has retraced about 40% from its all-time high. The measures include a Mayer Z-score near -1.5, a Sharpe Ratio in a low-risk band, the 200-week moving average acting as support, and roughly 39% of supply currently held at a loss. Long-term holders now retain more than 14.5 million BTC.
The Mayer Z-score, which compares price to the 200-day moving average, recently fell to about -1.5 standard deviations. That level previously appeared in March 2020, when price was near $3,000, and during the late-2022 decline at roughly $19,000. The same tag occurred at about $62,000 in the current cycle and price has since moved toward $80,000.
The Bitcoin Sharpe Ratio declined into a low-risk band, a range that coincided with cycle lows in 2015, 2019 and 2022. The share of supply held at a loss rose to about 39%, a proportion that has appeared in late stages of past drawdowns even while the price remained above six figures.
The 200-week moving average was tested and held without a clear violation, unlike episodes in 2018, 2020 and 2022 when the average was broken or briefly wicked below. A composite bull-run index did not reach its historical euphoria threshold during the recent expansion. Net unrealized profit and loss peaked in the belief zone rather than in the euphoria zone and later moved into an orange band associated with mid-bear conditions.
Long-term holders, defined as wallets that have held coins for at least 155 days, saw supply dip slightly in 2024 and then rise above 14.5 million BTC. In prior cycles, long-term holder supply decreased during market tops in 2014, 2018 and 2021.
Two hypotheses have been proposed to explain the long-term holder trend: some holders may be waiting for a higher peak before selling; or the long-term holder cohort may include ETF custody, sovereign reserves and corporate treasuries that hold BTC for non-cyclical reasons.
Prior bear cycles featured peak-to-trough declines of roughly 75% to 85%. The current retracement of about 40% from the all-time high is smaller than those prior declines.
On-chain measures across these six indicators aligned at levels that previously occurred at cycle bottoms during the recent period of price weakness.
