Bitcoin Cost Basis Signal Suggests Market May Be Nearing Bottom
A widely followed crypto analyst, known as Doctor Profit, believes Bitcoin may be approaching its market bottom. This conclusion is based on an on-chain metric that has historically appeared during past cyclical lows.
The average cost basis of short-term holders has fallen below that of investors who have held for one to two years, a pattern seen in 2015, 2019, and 2022. Short-term holders typically acquired Bitcoin within the last 155 days, and when their average cost is lower than longer-term investors', it indicates that newer entrants are selling at a loss.
In previous cycles, this condition marked a period where longer-term investors absorbed the supply, often preceding a bottom formation. However, Doctor Profit notes that this signal does not imply an immediate rebound and that past instances saw several months of sideways trading before any sustained upward movement.