Bitcoin rises 5% above short-term investors' cost price

Bitcoin is trading above short-term investors’ average cost price for the first time since the start of the current bear market. The price stands at $77.400, which amounts to a positive deviation of around 5% from the so-called STH cost basis. That means the majority of short-term investors are now in profit, a development that analysts regard as an early recovery signal.

Bitcoin is available at OKX and Bybit.

In brief:

• Bitcoin is trading above short-term investors’ cost price for the first time since the start of the bear market.
• The STH cost basis is between $70.100 and $71.900; the price is now around 5% above it.
• A similar pattern was also visible at the end of the bear market in 2023.

What is the STH cost basis?

The STH cost basis is not a single figure, but a range. The so-called Short Term Holders Cloud takes into account the capital invested spread across different age groups of coins, and thus reflects the average concentration point of capital that has been invested in Bitcoin over the past six months. Specifically, that range now lies between $70.100 and $71.900.

Because the price has been trading above this level for almost a month, most short-term investors are out of the red for the first time in a long time. Earlier, UTXO data also pointed to a possible end to the bear market.

Comparison with the 2023 recovery

On-chain analyst Darkfost states that this pattern strongly resembles what was seen at the end of the bear market in 2023. At that time, the return of short-term investors to profitable territory was also one of the first signals that the market was beginning a broader upturn.

Darkfost describes the return of short-term investors to a profitable position as a condition for further price increases. According to him, that step has now been taken. Whether the price will actually continue to rise further depends on how the market develops in the coming weeks. Bitcoin is currently moving between support at $71.300 and resistance at $79.800.