Bitcoin’s on-chain indicators are converging on conditions often seen late in a bear market, with long-term holders controlling an unusually large share of supply and the proportion of coins held at an unrealized loss retreating below a closely watched threshold. The data do not establish that a price bottom has formed, but they show selling pressure has become increasingly concentrated among a smaller pool of newer holders.
In mid-July, the average acquisition price for Bitcoin held by short-term holders continued to move closer to the cost basis of long-term holders. Short-term holders are generally defined in on-chain analysis as entities holding coins for fewer than 155 days, while long-term holders have held them beyond that period.
The short-term holder cost basis has fallen from roughly $112,500 at the cycle high to about $69,000, according to the figures cited in the dataset. That decline indicates that coins bought at higher prices have progressively changed hands or that recent buyers have acquired Bitcoin at lower levels. In prior cycles, convergence between short- and long-term holder cost bases has appeared during extended periods of market stress, when speculative demand has already been reduced.
Long-term holders hold 84% of tracked supply
Alphractal reported that long-term holders account for 84% of Bitcoin supply, leaving 16% classified as short-term liquid supply. The firm said this was the first such reading since 2016, and estimated that long-term holder stock was 5.2 times larger than the short-term liquid supply.
That split places a larger share of coins in addresses that have historically been less likely to trade frequently. It can reduce the immediately available supply held by recent buyers, although a high long-term holder share does not prevent those holders from selling if prices or market conditions change.
CryptoQuant separately reported that long-term holders added a net 1.29 million BTC in May, a monthly accumulation figure it described as the highest in six years. Its supply-age data indicated that coins held for six to 12 months were increasingly crossing into the long-term holder category, while liquid supply in other age bands was shrinking.
The transition matters for market structure because it reflects time rather than necessarily fresh purchases. Coins become long-term holdings once they remain unspent for the required period. A rising long-term holder balance may therefore capture both accumulation and the simple ageing of coins that were acquired months earlier and have not moved.
Loss share moves back below 50%
K33 data showed that more than half of circulating Bitcoin supply was held at an unrealized loss on June 5. That percentage subsequently fell to 46%, returning below the 50% level.
The movement means that part of the supply acquired at higher prices has either become profitable again, been transferred at lower prices, or both. Historical comparisons included in the K33 dataset associate a decline below 50% after an elevated-loss period with bottoming windows ranging from roughly 13 to 101 days. Such ranges are descriptive rather than predictive: each cycle has differed in macroeconomic conditions, spot demand and the scale of derivatives activity.
CryptoQuant’s realized cap variance Z-score was reported at negative 2.35, placing the reading in the lowest 6% of its historical range. The measure compares market-value conditions with Bitcoin’s realized capitalization, which values coins according to the price at which they last moved on-chain. A deeply negative reading has typically indicated that aggregate unrealized profitability is thin and the market has absorbed a substantial correction.
Together, the measures describe a market where many short-term participants have already faced losses while a larger group of older holders has remained inactive. They do not, by themselves, show renewed demand strong enough to sustain a reversal.
Resistance remains above the market
Momentum indicators cited in the data remain cautious. A short-term holder momentum measure is still negative, although its lows have risen over time, suggesting that downside momentum may be becoming less severe rather than turning decisively positive.
A separate bullish sentiment index stood at 20, well below the level of 60 referenced in the dataset as consistent with sustained upward momentum. The difference between improving supply conditions and weak momentum is central to the current setup: Bitcoin may be showing signs of seller exhaustion without yet demonstrating a broad return of buyers.
Two on-chain reference levels remain overhead. The first is the true market mean price, a model-derived measure of the market’s aggregate cost structure. The second is the average cost basis of short-term holders. Reclaiming those levels would put more recent buyers back into profit and could change their incentive from selling into rallies to holding through them. Failure to recover them would leave a substantial group of newer holders near break-even or underwater.
The scenarios cited in the source material place potential support near $58,000 if Bitcoin fails to clear a recent short-term holder cost-basis high. A separate model suggested that persistent miner selling could expose the market to a move toward $47,000. Both are model outcomes, not price targets established by the blockchain itself.
Technical and macro tests are approaching
The $65,000 area is one level traders may watch as Bitcoin attempts to recover its short-term holder cost basis. A sustained move above it would offer stronger evidence that recent buyers are no longer supplying the market into modest rallies. Rejection around that zone would preserve the weak-momentum picture reflected in the cited sentiment readings.
The 200-week moving average also remains a widely followed long-term technical reference. Bitcoin has historically spent relatively little time below it, though past performance does not make it a fixed floor. Holding above that average would support the argument that the market is stabilizing; losing it could increase attention on the lower support scenarios identified by the on-chain models.
The Federal Reserve’s July 29 interest-rate decision adds a near-term macroeconomic event that could affect risk appetite across financial markets. On-chain supply data can reveal how Bitcoin holders are positioned, but they cannot isolate the effect of monetary policy, liquidity conditions or sudden changes in demand.
For now, the strongest evidence is a supply structure dominated by older coins and a reduced share of Bitcoin held at losses. Confirmation of a durable recovery would require those conditions to be accompanied by stronger momentum and a successful move above the cost bases that continue to cap the market.
As Bitcoin exits its bear phase, learn when to buy with this guide: discover the best time to buy Bitcoin.
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