As Bitcoin continues to exhibit mixed price action, the leading crypto asset has recently signalled a development that has historically emerged close to the conclusion of bear markets. On Saturday, July 18, a crypto analytics platform shared onchain data indicating that the current market downturn may be entering its final phase. The analyst presented charts illustrating the cost basis of Bitcoin’s short-term holder wallets, defined as those that have held Bitcoin for less than six months, alongside long-term holders, who have maintained their positions for more than six months. The analyst observed that coins that have been dormant for more than seven years are omitted from the long-term holder cost basis to more accurately represent the behaviour of active long-term investors.
With Bitcoin sustaining a steady decline over the last nine months, the data indicates that the cost basis for short-term holders has now dipped below that of long-term holders. Such a market condition is widely regarded as a “end-of-bear-market” signal, according to market analysts. While traders are primarily focused on determining if Bitcoin has hit its bottom, it is crucial to understand that the crossover between the short-term holder and long-term holder cost basis does not necessarily indicate that Bitcoin has already reached its lowest point or that a new bull market is underway.
Rather, the onchain metric indicates that the market may be approaching the concluding phase of the present bear cycle. Notably, Bitcoin’s short-term holder cost basis has decreased from $112,500 to approximately $69,000. This implies that recent buyers have continued to acquire Bitcoin at lower prices throughout the downturn, positioning the asset for a potential shift in market sentiment.