The selling pressure from retail investors is about to exhaust, while large holders continue to accumulate coins. Bitcoin has been falling for nine months, and there are just two steps left until a market reversal.

Written by: Ashrith Rao

Translated by: Saoirse, Foresight News

After nine consecutive months of price decline, on-chain data for Bitcoin proves that the market has reached the end of the bear market.

This round of market conditions has three significant characteristics: the holding cost of long-term and short-term holders has shown a critical crossover, the circulating supply is experiencing unprecedented tightening, and speculative funds have been gradually and continuously exiting the market at a loss. This analysis relies entirely on data to examine the process of the market transitioning from deep losses to long-term capital accumulating coins, rather than subjective emotional judgments.

Crossover Signal: Market Power Transfer Completed

The most intuitive signal from the on-chain data dashboard is that the holding costs of long-term holders and short-term holders are converging, which serves as a highly valuable barometer.

In mid-July 2026, Bitcoin presented a classic bear market bottom indicator: the realized holding price of short-term holders has been consistently declining compared to that of long-term holders. This represents a collective stop-loss exit from short-term retail investors, rather than ordinary chart fluctuations.

Since the peak of this round of market conditions, the average holding cost of short-term holders has dramatically dropped from around $112,500 to $69,000. Long-term holders, often more mature investors with greater market information, maintain a strong holding cost; while recent inflow funds being sold off in large quantities have directly caused a significant drop in short-term holding costs.

Historical patterns indicate that such cost line crossings often signify the beginning of the final phase of a bear market. Retail investors with weak risk tolerance have been fully cleared by the market, while seasoned investors holding chips begin to dominate the subsequent market direction.

If the crossover state can be maintained long-term, it means the bottoming process has officially begun, with a sustained three-day stability in the crossover range being an important confirmation standard.

Supply Contraction: 84% Chip Barrier Formed

The crossing of long-term and short-term holding costs essentially signifies a change in market chip power dynamics, and the underlying supply structure can verify this change.

According to statistics from Alphractal, the proportion of Bitcoin held by long-term holders has reached a historic high of 84%. This is the first time since 2016 that the circulating liquidity available to short-term traders is only 16% of the total. The total long-term holdings are 5.2 times the short-term circulating chips, enough to prove that mature investors are persisting with their accumulation and have confidence in their holdings during the market downturn.

The scarcity of circulating chips creates a unique market structure: current market liquidity is at a historical low, and if market demand experiences a significant increase, Bitcoin prices are likely to experience violent fluctuations. Data from the crypto quantitative research firm CryptoQuant supports this assessment: in May of this year, the net increase of long-term holders reached a six-year peak, with a cumulative increase of 1.29 million Bitcoins.

Another obvious characteristic of the chip structure is that, apart from chips held for 6 to 12 months being transformed en masse into long-term holdings, circulating chips from all other holding periods are continuously decreasing as speculative funds continually withdraw.

Bottom Signal Confirmation: Panic Selling Enters Countdown

Combining the scale of lost chips with the realized market value variance (RCV) model can confirm that the market is at the end of a bear market.

K33 Research provides key data: on June 5, the proportion of circulating chips in a state of loss surpassed the critical line of 50%; currently, this proportion has retreated to 46%. Reviewing history, when the proportion of lost chips rises and then falls back below 50%, the subsequent bottoming period generally lasts from 13 to 101 days, and we have now entered the countdown to the bottom. The duration of this bottoming period ranks as the second longest in history, with various signs indicating that the worst phase of the market is likely over, rather than just the beginning of a decline.

The Z value of realized market value variance calculated by CryptoQuant is -2.35, which is at an extreme low position in the bottom 6% historically. This indicates that the current market is generally experiencing thin profits. Historical analysis shows that such ranges are often a precursor to subsequent considerable gains.

Currently, various indicators are gradually resonating, and prices have fully digested valuation pressures and adverse macroeconomic conditions, yet the market still lacks a clear entry point for buyers.

Risk Reminder: Market Reversal Still Needs to Meet Multiple Conditions

Although long-term chip data and other fundamentals lean toward positive signals, several momentum technical indicators are still raising alarms.

The overall momentum indicators for short-term holdings remain bearish, but the lows are gradually climbing; the bullish sentiment index is currently only at 20, which is still a considerable distance from the 60 threshold required for sustained upward support. The two key dynamic resistance levels – the real market average price and the average holding cost of short-term holders – have not successfully broken through.

Glassnode suggests that in order to confirm a complete reversal of the bull-bear trend, two prerequisites are needed: further alleviation of the selling pressure from retail panic selling and a stable positive flow of institutional funds. Several models predict that if Bitcoin miners continue to sell off for cash, the price could drop to $47,000; if they cannot break above the high holding cost of short-term positions, the market is likely to retreat to around $58,000 to seek support.

Overall, the market low is now in sight, but a complete bottom has not yet been established. Various data indicate that the market is in the final structured stage of a slow recovery from the low point. Although the complete reversal logic is not yet fully built, the foundational conditions for bottoming are being gradually established.