Bitcoin has already shown two cycle-bottom signals as of early July, but the “final small shake” Beggar had been expecting still has not appeared. In his latest analysis, he said that if this last drop keeps getting delayed, the market’s bottoming script may need to be revised.
The article was written by Beggar (@market_beggar) as part of a BlockTempo academy collaboration column. His focus is a “deviation-adjusted STH-RP” model. On the latest reading, STH-RP, or the short-term holder realized price, stands at 70,196. The model’s green line is at 57,955, and the blue line is at 51,047.
How the model is built
Beggar said the model starts with the mean and standard deviation of STH-MVRV since 2018. It then multiplies STH-RP by “the mean of STH-MVRV plus or minus n standard deviations” to generate different valuation bands. He said data from 2018 onward is used because STH-MVRV has shown a clearer mean-reversion pattern since that point.
- Red line = STH-RP multiplied by “the mean of STH-MVRV + 1 standard deviation”
- Yellow line = STH-RP
- Green line = STH-RP multiplied by “the mean of STH-MVRV 1 standard deviation”
- Blue line = STH-RP multiplied by “the mean of STH-MVRV 1.5 standard deviations”
In an earlier post on this model, he highlighted what he called “valuation resonance,” meaning the blue line sat very close to zones identified by other deep-bear valuation models.
Why the blue line may lose that resonance
His latest update argues that this alignment may not last. During bear-market phases, both the blue and green lines move lower over time. Since his previous update, the blue line has already dropped by about 800 points. Other deep-bear valuation models, he wrote, generally do not change by very much over the same period.
That creates a timing problem. If the final leg down takes too long to arrive, the blue line may drift far enough away from those other model ranges that the earlier resonance disappears. If that happens, traders may no longer be able to treat the blue line as the only meaningful trigger for a cycle bottom.
The green line as a new bottom anchor
From there, Beggar outlines another possible bottoming path: the green line continues to move lower and eventually replaces the blue line as the level that resonates with other deep-bear valuation models.
He said the blue line remains the model’s strongest rebound signal, but history does not require Bitcoin to touch it in every cycle low. He pointed to the 2022 bear market as an example. In that case, the final drop landed on the green line, and that green-line level also resonated with other deep-bear valuation models. Bitcoin did not fall to the blue line before that cycle bottom formed.
What this means in his framework
Based on that setup, Beggar said that if the “final small shake” eventually appears, traders may need to stop insisting that BTC must fall to the blue line. Instead, the green line may need to be treated as the new valuation anchor for a cycle bottom. In his words, if enough time passes, the green line will become the new trigger level for a cycle-bottom signal.
He also wrote that on-chain data reflects broad market behavior but cannot fully capture the thinking of individual investors. For that reason, he said he prepared a survey of Chinese-speaking crypto investors to better understand retail strategies, needs and pain points. The survey is anonymous, takes about one minute to complete, and is available at https://forms.gle/CTtNH34CXBbLF4eq7.
FAQ points included in the article
On what the deviation-adjusted STH-RP model is, the article says it uses STH-RP multiplied by the mean of STH-MVRV since 2018 plus or minus n standard deviations to draw four lines — red, yellow, green and blue — that mark Bitcoin’s cycle-bottom valuation zones.
On why the green line could replace the blue line as a BTC bottom signal, the article says the blue line moves lower during bear markets and has already fallen by about 800 points. If the final decline takes too long, its resonance with deep-bear models may fade. Because the last drop in 2022 landed on the green line, that level could become the new bottom anchor.
This article is for reference only and does not constitute investment advice. The cryptocurrency market is highly volatile, and investors should evaluate risks carefully before making decisions.