An analysis says a confirmation signal of entry into a bull market has emerged as Bitcoin short-term holders' (STH) cost basis has risen above the cost basis of active long-term holders (LTH). CoinPost, a blockchain media outlet, reported on Sept. 24 that on-chain analyst Darkfost viewed the signal as an indicator supporting a shift in Bitcoin market momentum.

The signal is triggered when the STH cost basis exceeds the cost basis of active LTH. STH and LTH generally refer to investor groups that have held for less than 155 days and for 155 days or more, respectively.

Darkfost excluded long-dormant supply in this analysis. He defined active LTH as supply that has moved at least once over the past 7 years. He judged that excluding supply that has not moved for a long period allows the LTH cost basis to better reflect actual market conditions. He added, however, that this standard is an arbitrary choice and is not perfect.

Darkfost said on July 11 he had presented a signal that the end of a bear market was nearing. He said this latest signal goes one step further by confirming a shift in market momentum. He assessed that this was the fifth case and somewhat raises confidence in Bitcoin's price trend, but said the possibility of error remains.

Bitcoin that has not moved for more than 10 years has exceeded 3.5 million BTC. This supply is increasing at a pace of about 8,000 BTC to 30,000 BTC per month on average. Since 2019, there has been only 1 instance when the increase turned negative, and an example cited as an exception was a case in which an old miner moved about 100,000 BTC.

Darkfost said he would provide an update if the signal is invalidated. He said Bitcoin is showing a very positive trend as ETF inflows continue. He drew a line, saying the analysis is based on his own indicator and does not guarantee the future price direction.