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BTC Rare signals on the chain suggest that the Bitcoin bear market may be coming to an end
A unique on-chain indicator has emerged recently, suggesting that the current Bitcoin bear market may be entering its final stage. CryptoQuant analyst Darkfost caught the signal-a signal that historical data shows has signaled the approaching of a major recovery in previous Bitcoin cycles.
Signals on the chain point to transition
Despite recent selling pressure, Bitcoin remains above the key support range, which has strengthened the market's optimism that the worst period of the current bear market may be coming to an end. According to Darkfost analysis, this signal appears when the cost base of short-term holders (STH) is lower than the cost base of long-term holders (LTH), and this status remains for at least three consecutive days.
The cost basis reflects the average price at which the holder purchases Bitcoin. Short-term holders are usually investors who hold for less than six months, while long-term holders hold for more than six months.
Darkfost pointed out that this situation is rare and often occurs in the final stages of previous Bitcoin bear markets, laying the foundation for a possible subsequent bull market.
However, the analyst also warned that the emergence of this signal does not guarantee an immediate reversal of the market. "This indicator suggests that Bitcoin may be at the end of a bear market, but it does not mean that the market will quickly turn to a bull market." he said.
Layout opportunities for DCA investors
Darkfost pointed out that when the short-term holder cost base is lower than the long-term holder cost base, it usually provides a favorable opportunity for investors adopting fixed investment strategies, because bitcoin prices tend to be relatively low at this time.
During the recent decline, new investors have continued to buy Bitcoin, causing the average purchase price for short-term holders to drop from US$112,500 to approximately US$69,000. This change triggered the above-mentioned rare on-chain crossing signal.
Small Dictionary: Dollar-cost averaging (DCA), a strategy in which investors spread their total investment into regular purchases of assets to reduce the impact of fluctuations.
According to Darkfost, the market is likely to usher in a new bull market only when new investors start buying Bitcoin at a higher price than long-term holders pay-a phenomenon that historically marked a recovery in demand.
Market Resilience and Technical Outlook
Bitcoin has shown resilience even in the face of continued challenges. After falling to $57,747 about three weeks ago, prices quickly rebounded and remained at important support levels above $60,000.
Market stability remained even after digital asset company Strategy sold 3,588 bitcoins (worth approximately $216 million) for dividend distribution.
The next key resistance level was identified at US$67,248. A break through this level will send a strong signal that the Bitcoin bear market may be over and the bull market may begin.
Currently, Bitcoin is trading at US$64,141, with a 24-hour trading volume of approximately US$29.31 billion, and a market value of approximately US$1.29 trillion. CoinMarketCap data shows its prices have risen 1.63% in the past 24 hours.
Analysts are closely watching whether they can continue to stand above US$67,248 to confirm Bitcoin's transition from a bear market to a bull market.
