Bitcoin Bear Market Nears Final Stage as Rare Cost-Basis Signal Flashes

Highlights:

• Bitcoin bear market signal appears after the short-term holder cost basis falls below the active long-term holder level.
• Short-term holders have lowered their average purchase price from roughly $112,500 to about $69,000.
• CoinShares sees a likely Bitcoin floor, but monetary policy still limits a sustained move above $80,000. 

The Bitcoin bear market may have entered the closing stage of its nine-month downturn, according to CryptoQuant analyst Darkfost. The signal comes from a shift in holder cost bases. Although the reading does not mark an immediate bottom, it matches patterns seen near earlier cycle lows.

Bitcoin Bear Market Enters its Final Phase

Darkfost tracked the average purchase price for short-term and long-term holders. Short-term holders own coins for less than six months. Long-term holders keep Bitcoin for more than six months. The model removes coins held for over seven years from the long-term holder calculation. Therefore, the measure focuses on supply that remains economically active. This adjustment gives a clearer view of holder behavior.

🟢 The end of the bear market is approaching.

The bear market has now been in full swing for 9 months, taking a toll on both STH and LTH alike.

⌈ 💡 As a reminder, STH refers to BTC holders <6 months, while LTH refers to holders >6 months.

In this chart, supply held for more… pic.twitter.com/fGx1VZNJIc

— Darkfost (@Darkfost_Coc) July 18, 2026

Recently, the short-term holder cost basis crossed below the active long-term holder cost basis. CryptoQuant used a three-day confirmation window before validating the signal. That confirmation has now occurred. Historically, this downward crossover has appeared during the final stage of a Bitcoin bear market. It does not confirm that selling pressure has fully ended. Instead, it shows that newer buyers have lowered their average entry price.

Meanwhile, short-term holders kept buying during market weakness. Their cost basis fell from about $112,500 to nearly $69,000. As a result, their average price moved below the long-term holder level.

Cost Basis Shift Echoes Earlier Market Cycles

The crossover reflects recurring behavior across Bitcoin market cycles. Newer holders often buy at declining prices and gradually reduce their average cost. Later, stronger demand can push their cost basis above the long-term holder level. That upward crossover has historically aligned with the start of a bull phase. Darkfost says traders can use that change to track improving momentum. Moreover, the signal may help define the closing stage of accumulation strategies.

Institutional participation has grown across recent cycles. However, CryptoQuant’s data suggests investor behavior still follows familiar patterns. Short-term holders react to falling prices, while longer-term holders maintain higher average costs. For now, the setup points to a mature downturn rather than a confirmed recovery. Bitcoin still needs an upward cost-basis crossover before the model identifies a bull phase.

Has Bitcoin Found Its Floor as Macro Conditions Improve?

As the Bitcoin bear market signal surfaces, CoinShares research head James Butterfill has shared a view that Bitcoin may have found its floor. According to the July 17 report, softer CPI and PPI data lifted rate-cut expectations, supporting fresh fund inflows after eight weeks of record withdrawals. Bitcoin also gained as markets reduced the odds of a September rate hike.

Softer US inflation data has helped sentiment turn for @Bitcoin, reshaping rate expectations and bringing inflows back after eight weeks of global digital asset ETP outflows across all issuers.

But @jbutterfill, Head of Research at CoinShares, sees a cautious setup: the floor… pic.twitter.com/UFPAtqJNvZ

— CoinShares (@CoinSharesCo) July 17, 2026

However, Butterfill sees limited upside without a sharper shift in monetary policy expectations. Rising oil prices may lift inflation again, weakening hopes for near-term easing. The firm expects range-bound trading and sees an $80,000 breakout as unlikely. Butterfill also added that blockchain equities are currently attracting stronger interest among investors.

At the time of this writing, BTC is trading at around $64,100, up by 2% in the last 24 hours. Its market capitalization and trading volume stand at $1.28 trillion and $20 billion, respectively.