Based on an analysis of on-chain metrics from the CryptoQuant platform, it can be concluded that the current bearish cycle of Bitcoin is entering its final phase. A signal based on the crossover of the cost bases of short-term and long-term holders has just been confirmed, indicating that a resolution is approaching.
The current bear market has been ongoing for nine months and is putting pressure on both key groups of investors. The first category includes BTC owners with a holding period of less than six months (short-term holders), while the second includes those who have held the asset for more than six months (long-term holders).
The Essence of the Signal: Cost Basis Crossover
The signal is determined by the moment when the average purchase price (cost basis) of short-term holders falls below the same indicator for long-term holders. For reliability, this dynamic must be confirmed for three consecutive days.
For the purity of calculations, coins that have not moved for more than seven years have been excluded from the long-term holders' cost basis. This allows for a more accurate reflection of the economically active portion of the supply and avoids distortions from "dormant" wallets.
It is important to understand: the activation of this signal does not mean that the bottom has been reached right now or that the bear market will end immediately. It merely indicates entry into the final phase of the cycle. In my professional opinion, this period is the most suitable for launching a strategy of gradual purchases (DCA), as it allows averaging the entry at potentially attractive levels.
Market Cyclicality and Investor Behavior
Behind this signal lies the fundamental cyclicality of Bitcoin. Cycle after cycle, investors demonstrate similar behavioral patterns. Notably, the arrival of institutional players has not changed this picture—the composition of holders and their habits remain the same.
The current cycle repeats the dynamics of previous ones: short-term holders buy more during dips, gradually lowering their average entry price until it falls below the level of active long-term holders. According to the latest data, the cost basis of short-term holders has already dropped from $112,500 to $69,000, confirming the development of this scenario.
Expert Commentary by Cryptalist: Historically, this signal has been a reliable precursor to the end of bearish phases. However, investors should remain cautious—the final stage may be accompanied by increased volatility and false moves. The DCA strategy under such conditions remains the most rational tool for accumulating a position.