Bitcoin Short-Term Holders' Cost Basis Drops Below Long-Term Holders, Triggering Bear Market End Signal

According to analysis shared by blockchain analytics platform CryptoQuant on July 18, Bitcoin short-term holders’ cost basis has fallen below the adjusted long-term holders’ cost basis, triggering a “bear market end” signal. This signal uses a 3-day confirmation window to compare the average purchase prices of short-term and long-term holders. 

The analysis indicates that short-term holders refer to investors holding Bitcoin for less than 6 months, while long-term holders refer to those holding for more than 6 months. The short-term holders' cost basis has dropped from $112,500 to $69,000, reflecting that Bitcoin purchased over the past 6 months is changing hands at lower prices. The analysis states that the adjusted long-term holders’ cost basis excludes Bitcoin held for more than 7 years to reduce the impact of dormant supply. The current crossover is described as a shift in holding structure, pointing to the late-stage of a bear market, but it does not equate to confirming a market bottom or the start of a new bull market. 

The analysis also suggests that if the short-term holders’ cost basis rises back above the adjusted long-term holders’ cost basis, it would align with bull market confirmation signals observed in previous cycles. Until then, this signal merely indicates that the Bitcoin bear market may be nearing its end.