Bitcoin Enters Fifth Bull Market Signal Amid ETF Liquidity Boost

A recent analysis by Cryptoquant contributor Darkfost has confirmed that Bitcoin is in its fifth bull market signal. This signal occurs when the short-term holder cost basis crosses above that of active long-term holders, and it has been observed four times before - in 2012, 2015, 2019, and 2023. The latest crossover is a significant development, as it suggests a change in what newer and longer-standing holders paid for their coins.

The analysis excludes dormant coins from the long-term holder calculation, which are defined as those that have remained untouched throughout the past seven years. This measure serves to provide a more accurate representation of active holders. The additional filter also helps to separate short-term from long-term supply, with Glassnode's holder definitions using an approximate 155-day holding period for this purpose.

The change in Bitcoin's momentum is partly attributed to liquidity entering through exchange-traded funds (ETFs). U.S. spot bitcoin ETFs took in $2.06 billion from Sept. 21 through Sept. 23, according to Farside's daily flow data. This influx of capital lends context to the liquidity argument and provides one route through which institutional and other fund investors can participate in the market.