Is the Bitcoin bull market still going on? STH’s cost basis suggests so

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Bitcoin’s price has been fairly still since hitting an all-time high of $108,135, struggling to maintain a six-figure valuation for long. Case in point, the top cryptocurrency barely managed to survive a day above $100,000 before falling to below $92,000 last week.

This snail-paced price action has sparked discussions about the likelihood of a top and an end to the Bitcoin bull market. However, the latest on-chain observations suggest that the flagship cryptocurrency may still have room for further price increases.

What is the current short-term cost basis for Bitcoin holders?

In its latest post on Platform X, blockchain analytics company Glassnode revealed that the Bitcoin bull market may not be over yet. This on-chain observation is based on the BTC price movement relative to the short-term holders (STH) cost base.

The STH cost indicator tracks the average price at which short-term holders (investors who hold Bitcoin for less than 155 days) purchased their coins. It represents a psychological level for BTC traders and can serve as a technical point for price analysis, especially during bull cycles.

Typically, Bitcoin’s price hovers above the STH cost base during a bull market, indicating forceful buying interest and positive sentiment from short-term investors. Conversely, when the price of BTC falls below this level – which is often seen in bear markets, it means that fresh investors are in the red, leading to significant selling pressure.

Source: Glassnode/X

According to Glassnode data, Bitcoin’s price is about 7% above the STH cost base, which is currently around $88,135. Although the main cryptocurrency is slightly closer to cost basis, it is still reasonable to assume that short-term holders are less willing to dispose of their assets.

If Bitcoin’s price remains above STH’s cost base, it will signal a potential continuation of the current bull market. On the other hand, a move below $88,000 could set the stage for a trend reversal that could see the market move from a bull phase to a bear phase.

At the time of writing, BTC is trading just above $94,000, reflecting just a 1% gain over the last 24 hours. According to CoinGecko data, the flagship cryptocurrency has lost over 3% over the last seven days.

Is a market recovery imminent?

The cryptocurrency market has been in terrible shape over the past week, with several large-cap assets dropping by double digits. It’s no wonder that many cryptocurrency traders have shown interest in unloading their assets on various social media platforms.

However, this change in investor sentiment increases the chances of market recovery as prices tend to move in the opposite direction to crowd expectations. Network intelligence firm Santiment noted in: write to X that this was the case in the rally that occurred in Q4 2024, when higher prices accompanied an augment in bear mentions.

Bitcoin
BTC price on the daily time frame | Source: BTCUSDT chart on TradingView

Featured image from iStock, chart from TradingView

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