An analyst known as Mr. Beggar (@market_beggar) has highlighted a historically reliable bear market bottom signal for Bitcoin: when the short-term holder realized price (STH-RP) falls below the long-term holder realized price (LTH-RP). According to his data, the two metrics are converging at roughly $199 per day, and at the current pace, the crossover could occur in about 106 days.
The Signal and Its Significance
The STH-RP tracks the average cost basis of short-term holders, who trade more frequently and are more sensitive to price changes. In contrast, the LTH-RP represents the cost basis of long-term holders, often considered 'smart money' with a cost advantage. Normally, LTH-RP sits below STH-RP. When STH-RP drops beneath LTH-RP, it indicates that market prices have fallen below long-term holders' cost basis and stayed there long enough to drag down the short-term average. Historically, this inversion has coincided with every Bitcoin bear market bottom.
Current Data and Projection
As of the latest figures, STH-RP stands at $70,558, while LTH-RP is $49,495, leaving a gap of $21,063. Since October 1 last year, STH-RP has been declining at an average rate of $153 per day, while LTH-RP has been rising at $46 per day. The combined rate of convergence is $199 per day. At this pace, the gap would close in roughly 106 days, potentially triggering the bottom signal again.
Caveats and Outlook
Mr. Beggar cautions that this is a rough estimate based on linear extrapolation; actual market dynamics are more complex. Nonetheless, he believes the data suggests the market is in the late stages of a bear cycle, with a bullish dawn approaching. The signal has not yet triggered, but the trend is worth monitoring for investors seeking entry points.