Bitcoin's bear market, now in its ninth month, is showing signs of transitioning into its final stage. A key on-chain indicator, based on the crossover of the cost bases of short-term and long-term holders, has just confirmed its activation. This does not mean an immediate reversal, but it indicates that we are entering the final phase of the current cycle.
Analyzing the behavior of the two main groups of market participants — short-term (holders up to 6 months) and long-term (holders over 6 months) — we see classic dynamics. The signal forms when the average purchase price (cost basis) of short-term holders drops below that of long-term holders, with confirmation needing to be recorded for three consecutive days.
For calculation purity, coins that have not moved for more than seven years have been excluded from the long-term holder base. This allows for a more accurate reflection of the economically active portion of the supply and avoids distortions from "lost" or long-forgotten wallets.
What the cost basis dynamics show
The current picture mirrors patterns from previous cycles. Despite the influx of institutional investors, the behavioral habits of market participants remain unchanged. Short-term holders are gradually buying the dips, lowering their average entry price until it falls below the long-term level. Currently, the short-term holder cost basis has already dropped from $112,500 to $69,000 — an impressive decline reflecting the scale of the correction.
It is important to understand: the activation of the signal does not guarantee that the bottom has been reached here and now. It is more of an indicator that the bear market is entering its final phase. Historically, this period is considered the most suitable for launching a strategy of gradual purchases (DCA).
My analysis: The market is showing maturity, repeating the cyclicality embedded in Bitcoin's DNA. Institutions have not changed the basic psychology — they have only added liquidity. For patient investors, the current moment could become one of the best entry points in the long term. However, it is not worth rushing to conclusions: the final phase may take several more weeks or even months.