A bitcoin supply indicator has issued a buy signal for the first time since November 2022, suggesting bitcoin may be approaching a 2026 bear-market low. Still, it is too early to say the price has already bottomed, blockchain media outlet Cointelegraph reported on July 3 (local time).

Axel Adler Jr (악셀 애들러 주니어), a contributor to on-chain analytics platform CryptoQuant, said in a post published on Friday that a key bitcoin buy signal has reappeared. The indicator, the "Advanced Net UTXO Supply Ratio", measures the share of bitcoin supply in profit and in loss based on the last time coins moved.

The indicator rebounded after re-entering negative territory for the first time in nearly 4 years. Adler said it dropped into deeply negative territory and then, during the rebound, crossed back above the signal baseline, producing buy signals across multiple sessions in late June and early July.

Adler drew a line at calling the signal confirmation of a macro bottom. He said the UTXO supply ratio signal tends to appear near cyclical lows rather than directly meaning a bear market has ended. Confirmation, he said, is a pattern in which the indicator stays above zero as prices rise, while a return to negative territory without price support would be a negative scenario.

A remaining variable is the amount of supply held at a loss. That figure has not yet reached levels seen in previous bear markets. Adler said he expects the 90-day simple moving average of loss-held supply to reach the bear-market reversal target within 2 months. He added it is more accurate to see capitulation not as something that is already over but as a process that is still under way.

Another CryptoQuant contributor, Darkfost (다크포스트), also linked the UTXO supply indicator this week to the possibility of a market turning point. He said the indicator can produce signals during both sharp declines and sharp rises depending on UTXO profit and loss status, but that a cyclical reading could also suggest the end of this bear market may be nearing. He said the likelihood is increasing that a bitcoin price bottom could form after the third quarter.