An on-chain analysis has suggested Bitcoin may not yet have confirmed its bear-market low.

Cointelegraph, a blockchain media outlet, reported on July 7 that on-chain analytics firm CryptoQuant said the NUPL indicator, which shows the profitability of Bitcoin supply, still has room to fall compared with past bottom signals.

NUPL shows whether the current circulating supply is in profit or in loss compared with the last moved price. The current reading is 0.158, similar to early 2023. CryptoQuant analyst TheChesOnChain (더체스온체인) assessed that viewing the indicator with 30-day and 100-day exponential moving averages makes it one of the clearest cycle clocks on-chain.

The key is the 100-day exponential moving average of NUPL. On the chart, it is slowly heading toward the cycle-low zone below zero. TheChesOnChain explained that each time the NUPL 100-day line fell below zero, Bitcoin effectively formed a cycle bottom. He cited late 2011, January 2015, the 2018 bear market and the 2022 FTX collapse, noting Bitcoin prices of around $2, $182, $3,206 and $15,792, respectively.

Given that Bitcoin is currently slightly above $63,000, the corresponding NUPL 100-day exponential moving average is 0.215. For the trend to repeat past bear-market lows, it would mean there is still an additional downside zone left. The suggested possibility of falling below $58,000 stems from the same context.

CryptoQuant did not conclude that it must fall below zero again this time. That is because Bitcoin has also shown a trend of NUPL lows gradually rising as cycles repeat. CryptoQuant described the four previous drops below zero as a pattern rather than a rule, and said two paths are open this time. It could drop below zero and confirm a bottom as in the past, or it could still form a low at a higher level than before.

Some reversal signals are already being detected in the market, but the mood is to place more weight on the possibility of an additional near-term low. In recent weeks, on-chain indicators have produced several bear-market reversal signals similar to 2022, but market participants believe another macro low could emerge before an uptrend regains the upper hand.

Supply indicators are also sending mixed signals. Another CryptoQuant analyst, Axel Adler Jr (악셀 애들러 주니어), said last week that it may still be about 2 months before the volume of supply in a loss reaches the traditional bear-market ending zone. "Until then, it is more accurate to treat capitulation as an ongoing process rather than as something that has already ended," he said.

As a result, the market focus in the coming weeks will be whether the NUPL 100-day line approaches zero. Whether it recreates the same low signal as in the past or forms a new pattern of a higher low is emerging as a key variable in gauging when Bitcoin's bear market ends.