A significant on-chain signal has emerged in the Bitcoin market, suggesting the current nine-month bear cycle may be nearing its conclusion.
On July 18, 2026, blockchain analytics platform CryptoQuant, through its analyst Darkfost, identified a rare “end of bear” signal: a downward crossover of the Short-Term Holder (STH) cost basis below the adjusted Long-Term Holder (LTH) cost basis.
Understanding the cost basis crossover indicator
This development implies the market is moving into its final bearish phase, though it doesn’t guarantee an immediate bottom.
The signal, which requires a three-day confirmation window for validation, is a crucial indicator for market observers. It hints at a structural shift in investor behavior, where newer market entrants are accumulating Bitcoin at price points below the average cost of long-term holders. This dynamic has historically preceded major market recoveries.
At its core, this signal tracks the average acquisition price of different types of Bitcoin holders. Short-Term Holders (STHs) are defined as investors who’ve held their Bitcoin for less than six months. Their cost basis reflects the average price at which these relatively recent buyers acquired their digital assets.
Conversely, Long-Term Holders (LTHs) have held their Bitcoin for more than six months. Their cost basis represents the average price these more seasoned investors paid. Crucially, CryptoQuant’s analysis uses an adjusted LTH cost basis, which excludes Bitcoin held for more than seven years.
This adjustment aims to provide a more accurate picture of active long-term investors, mitigating the distorting effect of potentially lost or dormant supply.
The “end of bear” signal materializes when the STH cost basis dips below this adjusted LTH cost basis. It indicates that the average entry price for short-term investors has now fallen below that of the committed long-term holders. This typically happens as weaker hands capitulate and new, often more resilient, buyers step in at lower valuations.
Market implications and historical precedents
This specific crossover doesn’t pinpoint an exact market bottom, nor does it immediately signal the start of a new bull market. Instead, it suggests the bear market is in its late stages, implying that significant price capitulation may have already occurred or is close to exhausting itself.
Bitcoin could still experience volatility or even trade lower in the short term before a sustained recovery takes hold.
The current bear market has lasted for nine months, making this signal particularly relevant for those looking for signs of a turnaround. Historically, such downward crossovers have been reliable indicators of a bear market’s terminal phase. They set the stage for eventual recovery, even if the path remains bumpy.
For instance, an upward crossover of the STH cost basis above the adjusted LTH cost basis has, in past cycles, aligned with bullish confirmations. That would be the signal for a confirmed bull market, meaning we’re not there yet. This current downward crossover is more a warning shot of impending change than an immediate all-clear.
Recent Bitcoin price action and holder dynamics
The signal emerges amid notable shifts in Bitcoin’s price and holder behavior. Bitcoin’s short-term holder cost basis has seen a significant decline, reportedly falling from approximately $112,500 to around $69,000. This steep drop reflects the aggressive selling and subsequent accumulation at lower prices by newer participants during the ongoing downturn.
On July 18, 2026, Bitcoin traded around $63,957, fluctuating between a daily low of $62,489 and a high of $64,332. Just two days prior, on July 16, 2026, the digital asset was priced at $64,878, with its daily range extending from $64,361 to $65,507. These recent price points are well below the previous STH cost basis, illustrating the recent market stress.
The fact that the average price for short-term holders has fallen below that of the long-term holders, particularly when Bitcoin itself is trading lower, underscores the depth of the recent correction.
It indicates that many short-term investors who entered the market at higher price points have either sold their holdings at a loss or are now holding below their cost basis, a characteristic feature of late-stage bear markets.
The cautious outlook for Bitcoin’s next phase
While the CryptoQuant signal offers a glimmer of hope, it also emphasizes the need for caution. The three-day confirmation window means analysts will be closely monitoring the metric for sustained validity. This period ensures the crossover isn’t just a transient fluctuation but a genuine shift in market structure.
The broader market will now look for further indicators that align with this “end of bear” signal. An eventual upward crossover of the short-term holder cost basis would represent a stronger bullish confirmation, signaling that the market has absorbed the selling pressure and is ready for sustained growth.
Until then, participants should prepare for continued uncertainty, even as the foundational metrics point towards a potential recovery on the horizon.