Key Takeaways:
CryptoQuant's chief executive predicts Bitcoin's bear market could persist into early 2027, citing an on-chain profitability index that historically shows 18-month loss cycles.
Bitcoin traded at $73,289 on Friday, down 10% from this month's highs, as CryptoQuant's chief warned the bear market could extend into early 2027.
"The trend only changes when unrealized profits rise and realized profits fall. We're not there yet," Ki Young Ju, chief executive at CryptoQuant, said in a post on X.
The CryptoQuant PnL Index, which measures investor profitability over a 365-day moving average, shows that loss periods typically last about 18 months after the onset of declines. Since the trend change started in October 2025, the bear market could last until early 2027, Ju said. The indicator previously recorded similar peaks before the prolonged bear markets of 2014, 2018 and 2022.
The warning comes as sell-order blocks worth significant volume have accumulated at the $74,200 to $74,500 range, according to CoinGlass, creating a resistance zone that could prevent a near-term recovery. Bitcoin's market capitalization has fallen to about $1.46 trillion, trailing major technology companies and commodities.
A record 15.8 million Bitcoin is now classified as long-term holder supply, according to CryptoQuant. While typically viewed as bullish, the firm argues the figure reflects a shortage of new buyers rather than strong conviction. Short-term holder supply has dropped by about 2.2 million BTC since December, with roughly 900,000 BTC of that decline coming from Coinbase reserves aging beyond the 155-day threshold used to classify long-term holders.
Whale balances — wallets holding between 1,000 and 10,000 BTC — are contracting year-over-year at the fastest pace of 2026, while monthly balance growth has remained near zero since February. Annual growth in "dolphin" balances, wallets holding between 100 and 1,000 BTC dominated by spot ETFs and corporate treasury buyers, has slowed sharply after peaking at 970,000 BTC in October 2025.
Total open interest in Bitcoin derivatives has dropped to approximately $55.26 billion, with 24-hour liquidations reaching about $223.9 million, according to CoinGlass. Long traders bore the brunt of the losses, with more than $30 million in bullish positions liquidated in the past 24 hours alone. Funding rates have turned negative across major exchanges, reflecting bearish positioning among leveraged traders.
Macroeconomic pressures are also weighing on risk assets. US PCE inflation rose 3.8% year-over-year in April, while escalating tensions between Iran and the United States have spooked global markets. Bitcoin ETF outflows have reached a record nine-day streak, with investors pulling $2.8 billion.
Glassnode said in a recent report that spot demand has weakened, ETF inflows have faded from earlier highs, and capital flows remain too modest to support a sustained move above key cost-basis levels near $78,000. The firm's Realized Profit/Loss Ratio currently sits at 1.56, below the 2 to 5 range typically associated with the early stages of persistent bull markets.
Prediction markets are also leaning toward stagnation. A Polymarket contract tracking Bitcoin's May 30 closing range assigns roughly 84% odds to BTC finishing between $72,000 and $76,000.
This article is for informational purposes only and does not constitute investment advice.
