On-chain analytics data indicates that the current Bitcoin bear market, which has lasted nine months, is entering its final phase. A key signal, based on the crossover of the cost bases of short-term and long-term holders, has just been triggered, marking a historically significant event for the market.
Analysis shows that the bearish trend has put pressure on both groups of investors. Short-term holders (owning coins for less than 155 days) and long-term holders (more than 155 days) have faced significant drawdowns. However, it is the dynamics of their average purchase price (cost basis) that now provides the clearest signal of a cycle change.
What does the cost basis crossover signal mean?
The essence of the indicator lies in the moment when the average purchase price of short-term holders drops below that of long-term holders. For analytical clarity, coins that have not moved for more than seven years have been excluded from the long-term basis calculations. This allows for a more accurate reflection of the economically active portion of the supply and avoids distortions from "lost" or long-forgotten wallets.
Currently, the short-term holder cost basis has already declined from $112,500 to $69,000. This suggests that many recent buyers have locked in losses or averaged down their positions during the decline. Once this line crosses below the long-term holder cost basis, the market typically confirms the transition into the final stage of the bear cycle.
Cycle repetition and the DCA strategy
It is important to understand: the triggering of this signal does not mean that the bottom has been reached here and now, or that a rally will begin tomorrow. It refers to entering the final phase. Historically, it is precisely during this period that the market exhibits the highest volatility and creates the best opportunities for entering the market using the dollar-cost averaging (DCA) strategy.
Notably, the influx of institutional investors in recent years has not altered this cyclical pattern. The composition of Bitcoin holders and their behavioral patterns have remained the same. Short-term holders continue to buy the dips, gradually lowering their average price until it falls below the level of the market's "veterans."
My expert opinion: This signal is one of the most reliable macro indicators in on-chain analytics. It does not predict the exact date of a reversal, but it clearly indicates that the "capitulation" of short-term speculators is nearing completion. For patient investors, a window of opportunity is now opening, but time remains the key factor — this phase could stretch over several weeks or even months.