Bitcoin bear market may be entering its final stage
blockchain Analytics platform Cryptoquant shared an analysis on July 18 that suggests: Bitcoin‘s bear market We may be nearing the final stage. This signal compares the average acquisition price of short-term and long-term holders.
The analyst said:
“The end is bear market is approaching. ”
Cost basis refers to the average price obtained by investors Bitcoin. Short Term Holder (STH) Bitcoin Long-term holders, or LTHs, are held for less than six months. cryptography Over 6 months.
This signal emerged when the STH cost standard fell below the adjusted LTH cost standard. The crossover indicates that the average cost basis of short-term holder supply is less than the average cost basis of adjusted long-term holder supply.
The analyst explained:
“The bear market end signal has just flashed. This signal is defined by the downward crossover of the STH/LTH cost criteria (with a 3-day confirmation window to validate the signal).”
This crossover indicates a change in the holder’s position rather than an exact bottom in the market. Bitcoin may remain volatile Or it will trade lower before a sustained recovery develops.
Chart shows the crossover sequence throughout the Bitcoin cycle
Charts included in analysis plots BitcoinThe price is aligned with the short-term holder (STH) cost basis and the adjusted long-term holder (LTH) cost basis. The analysis also marks a “bearish end” signal and subsequent upward crossover associated with a confirmed bull market phase.
The latest “bearish end” marker appears when the STH cost basis is below the adjusted LTH cost basis. Early cycles show the same sequence. That is, a downward crossover followed by an upward crossover and confirmation of a bull market.
The interval between the “end of the bear market” and the confirmation marker of the bull market indicates that: Bitcoin After the first signal, it may remain in a transitional stage. The first crossover was bear marketwhile the subsequent reversal suggests that the average cost basis for new buyers is gradually increasing.
Declining costs reflect purchases at lower prices
According to the analysis, the short-term holder’s cost basis decreased from $112,500 to $69,000. Drops are matched with Bitcoin Purchased at a lower price within the last 6 months.
This activity lowered the average acquisition price of STH. LTH cost standards change more slowly to reflect that. Bitcoin It accumulates over a longer period of time. Adjusted LTH calculations do not include: Bitcoin It has been held for over 7 years. This exclusion limits the impact of dormant supplies and focuses the index on long-term holdings that are considered economically active.
The analysis shows crossover as a recurring feature. Bitcoin Cycle: short-term holders accumulate Bitcoin During an extended period of decline, until the average cost basis falls below the cost basis of active long-term holders. We also argue that institutional participation does not fundamentally change this pattern.
Signal supports DCA before bull market confirmation
The analysis explains that the crossover is not a confirmation that prices will recover immediately, but rather the beginning of a late-stage accumulation period.
Analysts noted:
“This is not what I mean, bear market The moment the signal is given and the bottom hits, it ends, indicating that we are entering the final stage. DCA It makes sense. ”
dollar cost averaging methodor DCAinvolves investing a fixed amount of money over a long period of time rather than committing all your capital to one price. This strategy reduces reliance on identifying the exact bottom of the market.
According to the analyst framework, a bull market requires short-term holders’ cost basis to rise to a level above the adjusted level of long-term holders. This upward crossover is consistent with confirmation observed in previous cycles and suggests that recently acquired Bitcoins are trading at a gradually increasing average price. Until then, this signal suggests that the Bitcoin bear market may be nearing an end without confirming that a new bull cycle has begun.
