Bitcoin SOPR hits longest profit cycle in 2026, and bear market views shift

Bitcoin chain profitability shows signs of recovery, but market bottom confirmation still needs more evidence

Although the entire market is still struggling in uncertainty, trying to clarify the final formation position of the bottom of the cycle, Bitcoin seems to be showing signs of recovery in chain profitability. A widely watched indicator, the margin of profit on output (SOPR), has remained above the break-even line for an unusually long time in 2026, repeating a pattern that usually occurs early in bull market rallies.

Meanwhile, analyst David Puell warned in a recent interview that improvements in SOPR alone are not enough to conclude that a bear market bottom has been established. His views suggest that even as on-chain behavior turns more positive, investors should still respect the possibility of further downside risks.

Key Points

According to CryptoQuant data, Bitcoin's SOPR has remained above the breakeven threshold of around 1.002 since August 19. The current three-week rally is the longest consecutive period of bullish SOPR in 2026, a pattern that is often associated with recovery conditions early in the bull market.

Checkonchain's wallet group analysis shows that UTXO's profitability has begun to show bull market dynamics, including more profit-taking behavior, and these behaviors did not immediately lead to loss reversal.

Despite the rebound in SOPR, David Puell said investors still need more evidence before assuming that the next bear market bottom is established.

Longest consecutive bullish SOPR period in 2026

Cryptocurrency data analysis platform CryptoQuant reported that since August 19, Bitcoin's SOPR has been above its break-even level of 1.00. SOPR evaluates whether coins spent on the chain are profitable or losing relative to their previous trading price basis-therefore, a value greater than 1 usually indicates that the output being spent is more profitable.

In the current reading, SOPR is around 1.002, a level slightly above the break-even point, but significant because the indicator tends to fluctuate tightly around 1 over a long period of time. What's striking here is the duration: the indicator has remained bullish for three consecutive weeks, the longest such period recorded so far this year.

This timing is crucial for traders because SOPR does not just reflect a one-time rally-it can indicate whether the market is transitioning from the typical "sell after a rally" behavior of bear markets to the "buy on dips" pattern common in the early stages of bull recovery.

Wallet group analysis points to a shift in profit-taking

SOPR can be further broken down by wallet group, helping to distinguish whether improvements in profitability are occurring mainly among new participants or whether long-term holders are also spending in a way that suggests a broad recovery. As the comments related to CryptoQuant pointed out, decomposing SOPR by investor groups can clarify whether on-chain gains are concentrated in specific groups or become more common.

On this basis, Checkonchain emphasizes short-term holder (STH) SOPR-tracking the profitability of coins held for no more than six months and not sold. Checkonchain said in a weekend post on Platform X (formerly Twitter) that market structure is beginning to mimic early bull market recovery behavior:

"In bear markets, rallies to profit are usually sold off. In bull markets, short sharp declines below break-even point tend to be bargain-hunting opportunities. The current structure looks more like those early bull market recoveries."

This means that it is not that a retracement is impossible, but that the market may not quickly reverse a loss after returning to profitability. If this continues, it will strengthen the view that the market is shifting towards a more sustainable accumulation rather than a temporary rebound dynamic.

David Puell: SOPR helps, but downside risks remain

Even if SOPR trends improve, David Puell-an investor and fund manager known for creating the Puell multiple indicator-emphasized in an interview with CryptoQuant on September 4 that investors should not assume that the next bear market bottom has been established.

When Puell made these remarks, the BTC/USD market had been fluctuating in a local range around US$80,000. He believes more evidence is needed before changing his long-standing bias against confirmed recovery. When asked how Bitcoin's 25% rally in August unfolded in the fourth quarter, Puell suggested that further gains were less likely and framed his stance as downside risks.

"Based on our observations, as of now, we view this as a downside risk," he said. He also highlighted what he believes is a key prerequisite for changing the outlook: SOPR needs to remain above 1 for a longer period of time while meeting broader requirements that investors "continue to deliver profits without sending prices back to new lows."
Importantly, Puell's theory does not rely entirely on chain profitability. He also pointed out a technical requirement-Bitcoin needs to start printing a series of higher highs and higher lows on a weekly time frame.
Cointelegraph previously reported that this pattern is still missing on the weekly chart, reinforcing the current view that improvements in the chain may lead the price structure.

From "Bear market is over" to "Prove it to me": What to focus on next

SOPR's recovery also follows previous comments by CryptoQuant CEO Ki Young Ju, who described the bear market as "over" based on readings from the platform's bull/bear cycle indicator. This earlier assertion contrasts with Puell's more cautious demands, highlighting recurring tensions in cryptocurrency market analysis: On-chain signals may improve before prices confirm the new regime, and different indicators may lead at different speeds.

Readers should now focus on whether the continuous period of SOPR will turn into a continuous transformation rather than a temporary deviation. Puell effectively sets a threshold: SOPR must remain above the break-even point for a longer period of time without prices re-hitting new cyclical lows. Traders and investors should also watch to see if weekly price actions begin to demonstrate what Puell says is the structure of higher highs and higher lows that are still missing.

If SOPR remains bullish and the weekly structure eventually strengthens, the current on-chain pattern may shift from "early recovery similarity" to a stronger confirmation of cyclical changes. Conversely, if SOPR fade returns losses and prices fail to establish a trend, the market may show the kind of bear market volatility where profit-taking is unsustainable.