A unique on-chain indicator has emerged, suggesting the current Bitcoin bear market may be entering its final phase. CryptoQuant analyst Darkfost spotted this indicator, which historically has signaled the approach of major recovery rallies in previous Bitcoin cycles.
On-chain signals point to transition phase
Despite recent selling pressure, Bitcoin has held above a critical support range, fueling optimism that the worst of the current bearish trend could soon be over. According to Darkfost, the signal appears when the cost basis for short-term holders (STH) drops below that of long-term holders (LTH) and continues at this lower level for at least three consecutive days.
The cost basis reflects the average price at which holders acquired their Bitcoin. Short-term holders typically refer to investors who have held their BTC for less than six months, while long-term holders have maintained their positions for over six months.
This scenario, says Darkfost, is rare and has often preceded the final stage of previous Bitcoin bear markets, laying the groundwork for potential bull runs that followed.
However, the analyst cautioned that the presence of this signal does not guarantee an immediate market reversal.
This indicator suggests Bitcoin might be in the last part of its bearish phase, but it does not mean a rapid shift to bullishness is certain.
Investment opportunities for DCA investors
Darkfost noted that the phase where the STH cost basis sits below the LTH cost basis has generally offered a favorable opportunity for investors using dollar-cost averaging (DCA) strategies, as Bitcoin is typically priced lower during these moments.
During the recent decline, new investors continue to accumulate Bitcoin, which has resulted in the short-term holders’ acquisition price falling from $112,500 to approximately $69,000. This drop triggered the rare on-chain crossover referenced by the analyst.
Mini dictionary: Dollar-cost averaging (DCA), a strategy where an investor divides up the total amount to be invested across periodic purchases of an asset to reduce the impact of volatility.
According to Darkfost, a breakout into a new bull market may not occur until new investors begin acquiring Bitcoin at higher prices than those paid by long-term holders, which historically has signaled renewed demand.
| Group | Cost Basis (Previous) | Cost Basis (Current) |
|---|---|---|
| Short-term holders (STH) | $112,500 | $69,000 |
| Long-term holders (LTH) | – | – |
Market resilience and technical outlook
Bitcoin has demonstrated resilience even amidst ongoing challenges. After declining to $57,747 about three weeks ago, the price rebounded and remained above the important $60,000 support level.
Market stability persisted even after Strategy, a digital asset firm, sold 3,588 BTC—valued at nearly $216 million—for dividend distributions.
The next major resistance level is identified at $67,248. A break above this threshold would offer a strong signal that the Bitcoin bear market has likely concluded and a bullish phase may begin.
Currently, Bitcoin trades at $64,141, with a 24-hour trading volume of $29.31 billion and a market capitalization of $1.29 trillion. CoinMarketCap data shows the price is up 1.63% over the last day.
Analysts monitor whether a sustained move above $67,248 could confirm the transition from a bear to a bull market for Bitcoin.
