Bitcoin Shows Signs of Recovery – But Three Key Metrics Will Determine If a New Bull Market Is on The Horizon

Bitcoin is experiencing a rebound and has climbed back into the higher range of the $90,000s and low $80,000s after briefly dropping to the mid-$80,000s.

Key Takeaways

Bitcoin has rebounded to the high-$90,000 and low-$80,000 range but still faces uncertainty about the beginning of a new bull market.
The long-term trend remains positive, with Bitcoin above its 200-day EMA, a critical market indicator.
ETF holdings have declined, indicating cautious demand from institutional investors, particularly around Bitcoin's average price.
Short-term holders are currently above their cost basis, reducing the likelihood of panic selling, but concerns arise over the rising Bitcoin supply held at a loss.

Bitcoin Bouncing Signals Bull Market Potential

This upward movement has lessened the immediate downturn pressure; however, market analysis suggests that this rally alone isn't enough to confirm the start of a new bull market.

Analysts believe the next crucial step relies on whether several deeper market indicators shift towards a risk-on approach.

As of the latest update, Bitcoin was trading at approximately $89,500, reflecting a 1.4% increase in the last 24 hours.

Bitcoin Recent Trading Data

Despite the recent modest upward trend, Bitcoin has still dropped over 7% in the past two weeks, as it continues to face sustained selling pressure following its peak of nearly $126,000 late last year. Year-to-date, Bitcoin remains about 13% lower and approximately 29% below its all-time high.

Long-Term Trend of Bitcoin Remains Strong Despite Setbacks

One key factor in determining the longevity of this bounce is the overall trend structure.

Data from Glassnode reveals that Bitcoin is still trading above its 200-day exponential moving average (EMA), a long-term indicator respected by many institutional and macro traders.

200-Day EMA Analysis

Historically, trading above this level has been linked to structural bull markets, while slipping below it can indicate bear markets. The 200-day EMA is currently trending upward, showing that long-term demand has not diminished, and recent corrections appear to be just that—corrections and not a complete trend reversal.

Investor Caution as ETF Flows Slow Near Bitcoin’s Average Cost Basis

The second important metric focuses on demand, notably from institutional investors through U.S. spot Bitcoin exchange-traded funds (ETFs).

Since October 2025, ETF holdings have decreased by over $6 billion, an 8% drop from their peak levels, marking a significant stress test for this relatively new type of investor.

According to on-chain data from CryptoQuant, Bitcoin is now trading near the ETF realized price of about $86,600, which represents the average cost basis for ETF purchasers.

ETF Holdings and Demand Trends

Analysts note that this level acts as a psychological turning point; remaining above this price strengthens investor confidence and stabilizes flow, whereas falling below it has previously led to accelerated sell-offs as investors lose their profit buffer.

Although outflows have decreased and ETF realized prices have remained stable, inflows have not yet returned consistently, resulting in a cautious rather than a fully risk-on stance from institutional investors.

Short-Term Holders Prove Resilient as Bitcoin Tests Critical Price Levels

The third and perhaps most telling metric is the on-chain cost basis for new investors in Bitcoin.

Data from BitBo indicates that Bitcoin's current price is above the realized price for Short-Term Holders, which is estimated to fall between the high-$60,000s and low-$70,000s.

Short-Term Holder Cost Basis Insight

This suggests that most recent buyers have not yet turned a profit, making large-scale panic selling less likely and providing opportunities for buying during price dips.

Historically, trading above this level has indicated a favorable market condition, while persistent breaks below have signaled transitions into serious bear markets.

Glassnode mentioned this week that Bitcoin struggled to maintain its price around the short-term holder cost basis, which is near $96,500, leading to a slight pullback reminiscent of initial phases in prior bear markets from 2018 and 2022.

Recent Market Pullback Analysis

However, only about 19.5% of the supply held by short-term holders is currently at a loss, which is significantly lower than levels associated with widespread market capitulation.

Meanwhile, analysts at CryptoQuant express concern due to the rising trend of Bitcoin supply held at a loss—a pattern known to precede deeper bear markets, even as prices are drifting downward before finding stability.

They also point to diminishing on-chain demand, lowering retail participation, and macroeconomic uncertainties, particularly regarding U.S. liquidity, as factors influencing negative sentiment in the market.