Bitcoin Onchain Signal Says Worst of Bear Market May Be Over

As Bitcoin continues to show mixed price action, the leading crypto asset has just flashed a signal that has previously appeared near the end of bear markets.

On Saturday, July 18, crypto analytics platform CryptoQuant shared onchain data suggesting that the current market downturn may be entering its final phase.

Bitcoin bear season nears end

The analyst shared charts revealing the cost basis of Bitcoin's short-term holder wallets that have held Bitcoin for less than six months and long-term holders, which have held the asset for more than six months.

The analyst noted that coins that have remained untouched for over seven years are excluded from the LTH cost basis to better reflect active long-term investors.

With Bitcoin maintaining a consistent downward trajectory for the past nine months, the data shows that the short-term holder cost basis has now fallen below that of long-term holders.

Apparently, such a market condition is widely considered as an "end-of-bear-market" signal, according to market analysts.

Bitcoin at bottom level?

While traders are mostly curious about whether Bitcoin has reached its bottom yet, it is important to note that the crossover between the STH and LTH cost basis does not mean Bitcoin has already found its bottom or that a new bull market has begun.

Rather, the onchain metric suggests that the market could be entering the final stage of the current bear cycle.

Notably, Bitcoin's short-term holder cost basis has fallen from $112,500 to around $69,000. This implies that recent buyers have continued to buy Bitcoin at lower prices throughout the downturn, positioning the asset for a potential flip in market sentiment.