We are witnessing a critical moment in the structure of the current Bitcoin bear cycle. On-chain data shows the activation of a signal that historically precedes the end of the decline phase. This refers to the crossover of the cost bases of short-term and long-term holders—an indicator that has just been triggered, indicating the market is entering its final stage.
The bear trend has lasted nine months, putting pressure on both "newcomers" (BTC owners with less than six months of experience) and "veterans" (holders with more than six months of experience). However, we are now seeing a classic pattern that repeats from cycle to cycle.
What the Signal Says
The essence of the indicator is simple but effective: it captures the moment when the average purchase price of short-term holders (STH) falls below the average purchase price of long-term holders (LTH). For the purity of the analysis, coins that have not moved for more than seven years are excluded from the long-term holder base—this allows for a more accurate reflection of the economically active part of the supply. The signal is considered confirmed if the crossover holds for three days.
It is important to understand: this does not mean that the bottom has been reached right now or that the market will reverse tomorrow. However, it is a clear marker that we have entered the final phase of the bear market. Historically, such periods create optimal conditions for launching a dollar-cost averaging (DCA) strategy.
Why Cyclicality Persists
Despite the arrival of institutional investors, the basic psychology of the market has not changed. The composition of Bitcoin holders remains the same, and along with it, their behavioral patterns. Short-term speculators continue to buy the dips, gradually lowering their average entry price until it falls below the level of long-term "whales."
The numbers confirm this: the cost base of short-term holders has dropped from $112,500 to $69,000. This is a massive decline that reflects the scale of capitulation and, at the same time, the accumulation of positions by more patient players.
Expert Conclusion: This signal is not a guarantee of immediate growth, but a powerful indicator of a shift in the market phase. Long-term oriented investors should consider the current moment as a zone of strategic accumulation, rather than panic selling. History teaches us: it is precisely during such periods that the foundations for future bull rallies are laid.