Bitcoin has flashed a potential end-of-bear-market signal as the short-term holder (STH) cost basis fell below the adjusted long-term holder (LTH) level, according to blockchain analytics firm CryptoQuant. The crossover resembles patterns seen in previous cycles and suggests the market may be entering the final phase of its bear trend.
Indicator Points to Late-Stage Bear Conditions
CryptoQuant’s analysis highlights a crossover between the STH cost basis and the adjusted LTH cost basis. Historically, similar crossovers have occurred near the tail end of bitcoin bear markets, when selling pressure starts to diminish and longer-term holders retain stronger conviction than recent buyers.
What the Cost-Basis Crossover Means
- Cost basis (realized price): An on-chain estimate of the average price at which a group of holders acquired their coins, derived from blockchain transaction data.
- Short-term holders (STH): Typically coins moved within roughly the last five months, representing newer market participants more sensitive to price swings.
- Long-term holders (LTH): Coins held for longer periods, often seen as more price-resilient investors.
When the STH cost basis falls below the adjusted LTH level, it can indicate capitulation among recent entrants and a transfer of supply to stronger hands. In prior cycles, this has aligned with late-stage bear market dynamics and preceded more constructive market phases.
Context and Considerations
While on-chain signals can offer insight into market structure, they are not guarantees of future performance. Macro conditions, liquidity, spot demand, and broader risk sentiment can influence price action. Traders and investors often look for additional confirmation, such as improvements in spot volumes or sustained price strength above key on-chain and technical thresholds.
Why It Matters
Cohort-level cost-basis shifts provide a window into how different groups of bitcoin holders are positioned. A crossover that favors long-term holders has historically corresponded with a stabilization period in the market cycle, which can set the stage for the next directional move. Market participants will be watching for follow-through in on-chain and price-based indicators to assess whether the signal strengthens in the weeks ahead.