A key indicator tracking the overall health of the bitcoin BTC$77,880.68 market has just flashed a neutral signal for the first time since prices peaked above $126,000, signaling that the bear market may have ended.

But here’s the catch: The neutral reading on the indicator turned out to be a false signal a few years ago.

That indicator is CryptoQuant’s Bitcoin Bull Score Index, a composite metric that measures the health of the bitcoin market by analyzing ten key on-chain indicators, including blockchain activity, investor profitability, and liquidity.

It has climbed to 50 for the first time since the downtrend from $126,000 began. That number means exactly half of the index’s underlying indicators are now bullish, while the rest remain bearish. In other words, the indicator has flipped from bearish to neutral, confirming the end of the bear market, as first suggested by BTC’s price bounce from nearly $60,000 to $78,000.

For an index that has been stuck in bear territory throughout this cycle, reaching neutral is a genuine milestone. Note that readings below 40 signal a structural bear market, while readings above 60 indicate a strong, sustainable uptrend.

CryptoQuant’s analyst pointed to a relevant historical precedent: March 2022, when the index rose to 50, signaling the end of the bear market at the time.

Similar to today, prices had rebounded from around $35,000 to nearly $48,000 in the weeks leading up to the signal. That price action led many market participants to believe the bear market, which began near $70,000 in November 2021, had ended.

But guess what, prices more than halved to under $20,000 in the following months. In other words, the bear market deepened.

“First time in this bear market that the Bull Score Index enters neutral zone (50). In March 2022, the Bull Score entered neutral territory for about a week, and then the price resumed its decline,” Julio Moreno, head of research at CryptoQuant, said.

The bull score index hitting neutral is meaningful data, showcasing a real improvement in on-chain conditions rather than just price action.

However, the March 2022 precedent is a reminder that transitional phases can go either way, especially given that positioning in derivatives currently indicates a lack of conviction in the price recovery.

“Front-end vols around 40 vol remain subdued relative to realized, skew still favours downside protection, and term structure is only modestly upward sloping. Positioning continues to point to range-bound conditions rather than a sustained breakout,” Singapore-based QCP Capital, one of the largest digital asset trading firms, said in a market note.