Bitcoin short-term cost basis dips below long-term level

Cryptoquant published an analysis on July 18 reporting that Bitcoin’s short-term holder (STH) cost basis fell below an adjusted long-term holder (LTH) level. The firm described that crossover as an “end of bear market” signal while noting it does not confirm a market bottom.

Short-term holders are defined as wallets that have held bitcoin for less than six months. The adjusted long-term holder cost basis excludes coins held for more than seven years to limit the effect of very old, dormant supply.

Cryptoquant’s data show the STH cost basis declined from about $112,500 to $69,000. The analysis attributes the drop to bitcoin acquired within the past six months changing hands at lower prices. The adjusted LTH cost basis moves more slowly because it averages prices over a longer period.

The crossover is validated with a three-day confirmation window in the metric. Charts included in the report plot bitcoin’s price alongside the STH and adjusted LTH cost bases and mark past instances of the same sequence: a downward crossover during extended declines followed later by an upward crossover that aligned with confirmed bull phases.

An analyst who contributed to the report wrote, “The end of the bear market is approaching,” and also cautioned, “this doesn’t mean the bear market ends the moment the signal fires and the bottom is in, but it indicates we are entering its final phase, a period during which establishing a DCA makes sense.”

The report defines dollar-cost averaging (DCA) as buying fixed amounts at regular intervals rather than investing a lump sum at one price.

Under the framework used in the analysis, a new bull market would be signaled when the STH cost basis rises back above the adjusted LTH level, which would reflect recently acquired bitcoin changing hands at higher average prices. The report does not provide a timetable for when such an uptrend might occur and states that prices can remain volatile or move lower after the initial crossover.