A widely tracked on-chain metric is signaling a potential turning point for bitcoin, though analysts caution that the shift does not guarantee a sustained rally.

CryptoQuant’s bull-bear cycle indicator has turned positive for the first time since 2023, pointing to improving underlying conditions. On-chain analyst Julio Moreno said the move typically suggests that the harshest phase of a market downturn has ended, with early signs of recovery beginning to emerge.

Historically, this transition has coincided with key inflection points. When the indicator moves out of bearish territory, it often reflects strengthening momentum beneath the surface, even if prices have yet to fully confirm the shift.

Still, some experts stress that the metric should not be viewed as predictive. Mati Greenspan, founder of Quantum Economics, described it as a regime indicator rather than a crystal ball. Its primary function, he said, is to signal when bitcoin stops behaving like a bear-market asset.

Greenspan added that confirmation must come from sustained demand, stronger liquidity, and the ability of prices to hold higher levels. Until then, market participants should look to price action for validation.

Past signals in 2019 and early 2023 were followed by strong bullish trends, but Moreno noted that March 2022 serves as a reminder that false positives are possible. In that instance, the indicator turned positive briefly before the market continued lower.

The current setup presents a mixed outlook. While on-chain data points to a constructive shift and improving momentum, bitcoin remains capped below the $82,000 resistance level. The asset has rebounded about 35% from its February lows near $60,000 but has yet to achieve a decisive breakout.

Moreno also highlighted signs of fatigue in secondary indicators, suggesting that the market may need more time to build a durable uptrend. The backdrop is further complicated by neutral sentiment readings and broader macroeconomic uncertainty.

Some market participants remain optimistic. Arthur Hayes, CIO of Maelstrom and co-founder of BitMEX, believes bitcoin likely found a bottom near $60,000 earlier this year. He has identified $90,000 as a key level that could trigger a more aggressive move toward previous highs around $126,000.

At the same time, analysts warn against overinterpreting on-chain data. Jason Fernandes, co-founder of AdLunam, said indicators such as MVRV and NUPL are better suited for understanding market behavior and positioning within the broader liquidity cycle, rather than serving as precise trading signals.