Blockchain analytics platform Cryptoquant shared an analysis on July 18 suggesting Bitcoin's bear market may be approaching its final stage, triggered by a technical crossover between short-term and long-term holder cost basis metrics. The signal appeared when the short-term holder (STH) cost basis—representing investors who held Bitcoin for less than six months—fell below the adjusted long-term holder (LTH) cost basis at $69,000, down from $112,500. The analyst stated the crossover indicates a late-stage bear market phase rather than a confirmed bottom, noting that Bitcoin could remain volatile before any sustained recovery develops. This cost basis pattern has recurred across previous Bitcoin cycles as a marker of transitional accumulation periods.
Cost Basis Crossover Defines Late-Stage Bear Market Signal
Cost basis refers to the average price at which investors acquired Bitcoin. Short-term holders have held Bitcoin for less than six months, while long-term holders have held the cryptocurrency for more than six months. The Cryptoquant analyst explained that the "end-of-bear-market signal has just flashed," defined by the downward crossover of the STH/LTH cost basis with a 3-day confirmation window to validate the signal.
The crossover marks a shift in holder positioning rather than an exact market bottom. The analyst stated: "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." The adjusted LTH calculation excludes Bitcoin held for more than seven years, limiting the influence of dormant supply and focusing the metric on long-term holdings considered economically active.
Historical Chart Shows Crossover Pattern Across Bitcoin Cycles
The chart included in the Cryptoquant analysis plots Bitcoin's price alongside the short-term holder cost basis and the adjusted long-term holder cost basis. It marks "end of bear" signals and later upward crossovers that the analysis associates with confirmed bull-market phases. The newest "end of bear" marker appears where the STH cost basis falls below the adjusted LTH cost basis.
Earlier cycles show the same sequence: a downward crossover, followed later by an upward crossover and bull-market confirmation. The interval between the "end of bear" and bull-market confirmation markers shows that Bitcoin can remain in a transitional phase after the initial signal. The first crossover points to the bear market's final stage, while the later reversal suggests the average cost basis of newer buyers is rising progressively.
Short-Term Holder Cost Basis Drops from $112,500 to $69,000
According to the analysis, the short-term holder cost basis has declined from $112,500 to $69,000. The drop is consistent with Bitcoin acquired within the past six months changing hands at lower prices, reducing the average STH acquisition price. The LTH cost basis changes more gradually because it reflects Bitcoin accumulated over a longer period.
The analysis presents the crossover as a recurring feature of Bitcoin cycles: short-term holders accumulate Bitcoin during prolonged declines until their average cost basis falls below that of active long-term holders. The analyst argued that institutional participation has not fundamentally changed this pattern.
Analyst Recommends Dollar-Cost Averaging Strategy During Accumulation Phase
The Cryptoquant analyst described the crossover as the start of a late-stage accumulation period rather than confirmation that prices will immediately recover. The analyst noted: "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."
Dollar-cost averaging involves investing fixed amounts over time rather than committing all capital at one price. The strategy reduces reliance on identifying the exact market bottom. Under the analyst's framework, a bull market would require the short-term holder cost basis to rise back above the adjusted long-term holder level. That upward crossover would match the confirmation observed in earlier cycles and suggest that recently acquired Bitcoin is changing hands at progressively higher average prices.
FAQ
What is the Bitcoin cost basis crossover signal that appeared on July 18?
The signal occurred when Bitcoin's short-term holder cost basis fell below the adjusted long-term holder cost basis at $69,000, down from $112,500. Cryptoquant's analysis defines this downward crossover as an "end-of-bear-market signal" with a 3-day confirmation window, indicating Bitcoin may be entering the final phase of its bear market rather than confirming an immediate bottom.
Why does the analyst recommend dollar-cost averaging during this phase?
The Cryptoquant analyst stated that the crossover marks "a period during which establishing a DCA makes sense" because it represents a late-stage accumulation period. Dollar-cost averaging involves investing fixed amounts over time, reducing reliance on identifying the exact market bottom while Bitcoin remains in a transitional phase before any confirmed bull-market reversal.
What would confirm a new Bitcoin bull market according to this analysis?
A bull market confirmation would require the short-term holder cost basis to rise back above the adjusted long-term holder cost basis. This upward crossover has matched bull-market confirmations in earlier Bitcoin cycles and would suggest that recently acquired Bitcoin is changing hands at progressively higher average prices.
