3 Key Signs Bitcoin Has Hit Bottom & Is Entering a Bullish Phase

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Bitcoin’s on-chain data is signaling a potential bullish reversal, with analysts pointing to three key indicators that suggest the cryptocurrency may have bottomed out and entered early-stage recovery. The most prominent signal—a buy trigger from the Hash Ribbons metric—has emerged as a historically reliable precursor to price rallies, according to verified on-chain analysts and market reports.

Hash Ribbons Buy Signal: A Historical Precursor to Bitcoin’s Rally

The Hash Ribbons indicator, which tracks the 30-day and 60-day moving averages of Bitcoin’s hash rate, has generated a buy signal for the first time since the 2024 halving cycle. This metric, developed by Glassnode, has previously correlated with significant price surges: in July 2025, the signal appeared when Bitcoin traded around $98,000, followed by a 25% rally to $123,000 by October of that year.

On-chain analyst OnChainMind, cited in verified reports from January 2026, described the current signal as occurring during a “miner capitulation phase,” where unprofitable mining operations have significantly reduced hash power. The analyst noted that such signals have repeatedly preceded strong bull markets in the past, including after the FTX collapse in late 2022 and during the 2024 yen carry trade unwinding.

“Hash Ribbons buy signals have historically appeared just before strong Bitcoin rallies. The last occurrence in July 2025 was followed by a 25% price increase, and we’re now seeing similar conditions unfold again.”

OnChainMind (via CoinTelegraph, January 20, 2026)

Supporting Technical Confirmation: The 120-Day Price Line

Beyond the Hash Ribbons, Bitcoin’s price action is reinforcing the bullish thesis. The cryptocurrency has maintained its position above the 120-day moving average, a critical technical level that has historically separated prolonged bear markets from recovery phases. While specific price targets remain speculative, analysts emphasize that sustained trading above this line—particularly amid miner capitulation—has preceded multiple prior bull runs.

Market participants are also monitoring Bitcoin’s ability to stabilize above the $90,000 psychological threshold, a level some analysts consider essential for confirming a durable bottom. Short-term volatility, however, remains elevated due to external factors, including recent hash rate disruptions caused by severe weather events in the U.S., which temporarily reduced mining activity.

Broader Market Context: Miner Capitulation as a Catalyst

The current miner capitulation phase—evidenced by the Hash Ribbons signal—aligns with broader trends observed in prior cycles. When mining difficulty adjusts downward (a lagging indicator of falling hash power) and unprofitable miners exit the network, it typically signals that the market has absorbed significant selling pressure. This dynamic creates a supply shock that can propel prices higher once demand recovers.

Verified reports from January 2026 indicate that extreme weather events, including storms in key mining regions, exacerbated the hash rate decline. While such disruptions are temporary, they accelerate the capitulation process by forcing marginal miners to shut down operations prematurely. Glassnode’s data suggests that similar hash rate shocks in 2021 and 2023 were followed by sharp rebounds as miners later returned to the network with improved profitability.

What Comes Next: Caution Amid Bullish Signals

While the Hash Ribbons buy signal and 120-day moving average support are bullish, analysts caution that Bitcoin’s path to sustained recovery will depend on additional macroeconomic and on-chain developments. Key variables include:

• Miner profitability thresholds: Bitcoin’s price must remain above the average mining cost (~$75,000–$80,000) to prevent further capitulation.
• Institutional demand: Renewed interest from spot ETF inflows or large-scale investor accumulation could accelerate the rally.
• Macro conditions: Geopolitical stability and interest rate trends will influence risk appetite in crypto markets.

Historical patterns suggest that once Bitcoin clears the $90,000–$95,000 range with strong volume, the next major resistance levels—historically around $110,000–$120,000—could become targets. However, the absence of clear catalysts (such as regulatory clarity or a major macro event) means the rally may initially unfold gradually.

For now, the confluence of on-chain signals—particularly the Hash Ribbons buy trigger—provides a data-driven rationale for optimism. Yet, as with all market cycles, patience and risk management remain critical as Bitcoin navigates its transition from bearish exhaustion to potential bullish momentum.