A signal that has often appeared late in bear markets has again been confirmed in Bitcoin on-chain indicators.

On July 18, local time, blockchain outlet U.Today reported that CryptoQuant analysed the crossover in the average purchase prices of short-term and long-term Bitcoin holders and said the current downturn may be entering its final stage.

The key is a reversal between the cost basis of wallets held for less than six months and that of wallets held for more than six months. A CryptoQuant analyst pointed to Bitcoin extending a consistent downward trend over the past nine months, while the short-term holders' cost basis dropped below the long-term holders' cost basis. The market widely views such a stretch as a "bear market end signal," the report said.

The indicator was calculated after partly adjusting the definition of the long-term holder cohort. Coins that have not moved for more than seven years were excluded from the long-term holders' cost-basis calculation. CryptoQuant said the method is intended to better reflect the average cost basis of long-term investors who are actually participating in the market.

CryptoQuant also made clear the signal alone does not allow a firm conclusion that Bitcoin has already bottomed. It drew a line, saying the crossover between the short-term and long-term holders' cost basis "does not mean Bitcoin has already found a bottom or that a new bull market has started." What the indicator shows now is closer to the possibility that the current bearish cycle is entering its "final stage."

Market participants' focus is ultimately on whether Bitcoin has confirmed an actual bottom. But the latest on-chain signal puts more weight on the idea that downward pressure may be nearing its final phase rather than confirming a bottom. That leaves the next point to watch as whether the short-term holders' cost basis stabilises further, and how the gap with long-term holders develops.