A MarsBit analysis argues that Bitcoin is moving into the closing phase of its bear market after nine consecutive months of price declines, though the market still lacks clear upside momentum.
The article, written by Ashrith Rao and translated by Saoirse for Foresight News, frames the current cycle around three defining features: a key crossover in the cost bases of long-term and short-term holders, an unprecedented tightening in circulating supply, and a prolonged washout of speculative capital. The report says its conclusion is based on on-chain data rather than sentiment-driven judgment.
Cost-basis crossover points to a shift in market control
The clearest signal on the on-chain dashboard, according to the article, is the convergence between the cost bases of long-term holders and short-term holders.
By mid-July 2026, Bitcoin showed what the piece describes as a classic bear-market bottoming signal: the realized cost basis of short-term holders moved below that of long-term holders and stayed there. In the article’s reading, that reflects broad stop-loss driven exits by short-term retail participants rather than ordinary chart noise.
Since the cycle high, the average cost basis of short-term holders has dropped from roughly $112,500 to $69,000. Long-term holders, described as more mature investors with better market information, have kept a much firmer cost basis. The article says heavy selling by more recent entrants directly pushed short-term holder cost levels lower.
Historically, this kind of crossover has often marked the beginning of the last stage of a bear market. The piece says it tends to coincide with weaker hands being flushed out, leaving more seasoned investors with greater control over the next phase of price action.
If the crossover can hold over time, the report says, the base-building process can be considered underway. Holding that zone for three consecutive days is presented as an important confirmation threshold.
Long-term holders reach 84% of supply as liquidity tightens
The analysis says the crossover in holder cost bases is, at its core, a transfer of control over market supply, and that the underlying supply structure supports that view.
Citing Alphractal data, the report says long-term holders now account for a record 84% of Bitcoin supply. That leaves only 16% of total supply as liquid inventory available to short-term traders, the first time this share has fallen that low since 2016. Based on the figures in the article, long-term holdings are now 5.2 times larger than short-term liquid supply.
That setup suggests experienced investors have continued to accumulate during the market downturn and remain confident in their positions. With tradable coins increasingly scarce, market liquidity has fallen to historically low levels. The article says a meaningful pickup in demand under those conditions could produce sharp price swings.
It also cites CryptoQuant data showing that long-term holders posted their strongest net position increase in six years in May, accumulating 1.29 million BTC.
The report points to another change in the holder structure as well. Coins held for six to 12 months are being converted into long-term holdings in large size, while liquid supply across every other holding-duration cohort continues to shrink. In the article’s view, that is another sign that speculative capital is still leaving the market.
Loss supply and RCV model place Bitcoin near a bottoming window
The article then combines loss-making supply data with the realized cap variance, or RCV, model to argue that the market is in the late phase of the bear cycle.
K33 data cited in the report shows that on June 5, the share of circulating Bitcoin supply sitting at a loss moved above the 50% threshold. That figure has since fallen back to 46%. Looking at past cycles, the article says that once the ratio rises and then drops back below 50%, the following bottoming period has generally lasted from 13 to 101 days. On that basis, it says the current market has entered a countdown phase near a bottom.
The piece adds that the length of this grinding bottoming process is the second longest on record. Taken together, it argues that the worst part of the cycle has probably already passed rather than just begun.
On valuation, the report says CryptoQuant’s realized cap variance Z-score stands at -2.35, placing the market in the bottom 6% of historical readings. The article interprets that as a sign that profits across the market are generally thin. In prior cycles, similar zones often came before periods of outsized gains.
Even so, the article says there is still no clear buy signal. A number of indicators are beginning to align, and price has already absorbed valuation pressure and macro headwinds to a significant extent, but the market has not yet delivered a decisive entry setup.
Reversal still depends on several conditions
The risk section of the analysis says that while fundamentals tied to long-term holder supply look constructive, momentum indicators are still flashing warnings.
Short-term holder momentum remains broadly bearish, though the lows are getting higher. The bullish sentiment index stands at only 20, well below the 60 level the article says is needed to support a sustained advance. Bitcoin has also failed to break above two key dynamic resistance levels: the true market mean price and the average cost basis of short-term holders.
Glassnode says a full bull-bear trend reversal requires two conditions: continued easing in panic selling by retail investors and a stable improvement in institutional fund flows.
The article also cites estimates from multiple models saying that if miners keep selling to realize cash, Bitcoin could fall to $47,000. If price cannot break above the higher short-term holder cost basis, it will likely retreat toward the $58,000 area to seek support.
Overall, the report says the market is getting close to a low, but the bottom has not been fully confirmed. Bitcoin remains in the final structural stage of a slow repair from depressed levels. The complete reversal case is not in place yet, though the basic conditions for a bottom are gradually falling into place.