On-chain indicators suggest that the current bitcoin bear cycle is entering its final stage. An analysis of network data by CryptoQuant expert Darkfost shows the activation of a key signal that has historically preceded a trend reversal. This involves the crossover of the cost bases of short-term and long-term holders.
What does the on-chain metric indicate?
The essence of the signal is that the average purchase price for short-term investors (holding coins for less than 6 months) drops below the average price for long-term investors (holding for more than six months). For analytical clarity, coins that have not moved for more than 7 years were excluded from the calculation of the long-term holder cost basis — this allows for a more accurate assessment of the economically active portion of the supply. The crossover of these lines, confirmed over three days, is a powerful indicator of a market cycle change.
It is important to understand: this signal does not mean the bottom has already been reached or that growth will begin tomorrow. It merely indicates that the market is entering the final phase of the bearish trend. It is this period, in my professional opinion, that is most suitable for launching a dollar-cost averaging (DCA) strategy. The current dynamics are not a time for panic, but a time for cold calculation and gradual position building.
Market cyclicity and investor behavior
The analyst rightly notes that the arrival of institutional players has barely changed the behavioral patterns of market participants. Cycle after cycle, we see the same picture: short-term holders, buying on dips, gradually lower their average entry price until it falls below the level of long-term investors. This confirms that market psychology remains unchanged, despite the growth in market capitalization and the emergence of new players.
The numbers clearly confirm this. The cost basis of short-term holders has already dropped from $112,500 to $69,000. This is a massive decline that reflects the scale of the current correction and the degree of capitulation among recent buyers. Once this process is complete, the market will be ready for a new bull rally.
Expert comment: The bitcoin market follows strict cyclical laws, and the current signal is not a coincidence, but a natural outcome of a 9-month correction. For investors ready for a long-term perspective, this stage should be seen not as a threat, but as an opportunity to enter at attractive prices. History shows that it is precisely the periods of maximum fear and the final phase of the bear market that precede the most impressive rallies.