In crypto trading, timing matters — but so does understanding who’s buying, who’s holding, and at what price. That’s where the Long/Short-Term On-Chain Cost Basis comes in — a powerful on-chain metric that provides deep insight into market sentiment and potential turning points.
Think of Bitcoin holders like residents of a city:
- 🧓 Long-Term Holders (LTHs) are the seasoned veterans — they’ve weathered multiple market cycles.
- 🧑🚀 Short-Term Holders (STHs) are newcomers — more reactive, more sensitive to price changes.
Let’s explore how this metric works and why it’s valuable for traders and investors.
📘 What Is the Long/Short-Term On-Chain Cost Basis?
The Long/Short-Term On-Chain Cost Basis is an advanced on-chain indicator that shows the average acquisition price (cost basis) for two groups:
- LTH (Long-Term Holders): Holding BTC for over 155 days
- STH (Short-Term Holders): Holding BTC for 155 days or less
These values are calculated using Realized Price — the average price at which coins were last moved on-chain.
🔍 Why 155 Days?
Data shows that coins held for more than 155 days are statistically less likely to move — indicating stronger conviction or “diamond hands.”
🧠 What Is Realized Price?
Realized Price = Total USD value of all coins at the time of last movement ÷ circulating supply.
Different types:
- 🔴 STH Realized Price: Average price paid by recent buyers (highly reactive to volatility)
- 🔵 LTH Realized Price: Average cost basis of long-term holders (signals long-term sentiment)
- 🟠 Aggregate Realized Price: Network-wide average
📊 How to Read the Long/Short-Term Cost Basis Chart
Chart Breakdown:
| Line Color | Metric | Description |
|---|---|---|
| ⚫ Black | BTC Spot Price | Current market price of Bitcoin |
| 🔴 Red | STH Realized Price | Cost basis of recent buyers (holding <155 days) |
| 🔵 Blue | LTH Realized Price | Cost basis of long-term holders |
| 🟠 Orange | Aggregate Realized Price | Average for all BTC holders |
| 🟣 Purple | Capitulation Zone | BTC below all cost bases = undervaluation risk |
Key Insights:
- ✅ BTC above all cost bases = Bullish structure
- ⚠️ BTC below STH cost basis = Weak hands may sell
- 🔻 BTC below LTH cost basis = Market-wide pain or capitulation
- 📈 Rising STH cost basis = Retail buying pressure
- 💎 Steady LTH cost basis = Strong HODLing sentiment
💡 Why This Metric Matters for Crypto Traders
This metric helps you:
🔄 Spot Market Cycle Phases
- Capitulation zone: BTC trades below both STH and LTH cost basis
- Bullish momentum: BTC stays above both cost bases
- Trend shifts: Crossovers or rapid shifts in STH/LTH prices may hint at macro changes
📉 Identify Support and Resistance Levels
- Cost bases often act as psychological support or resistance.
- STH realized price can cap rallies or offer support in uptrends.
- LTH realized price is a key long-term support level during corrections.
📣 Gauge Sentiment by Holder Group
- STHs are prone to emotional trading and quick exits.
- LTHs signal institutional sentiment, long-term conviction, and often accumulate in bear markets.
🟠 Summary Table
| Metric | Signal Type | Market Implication |
|---|---|---|
| BTC < All Realized Prices | Capitulation Zone | Potential market bottom / accumulation |
| BTC > All Realized Prices | Profit Zone | Bullish continuation |
| STH Cost Basis Rising Rapidly | Retail Buying Spike | Risk-on sentiment, possible late-stage bull |
| LTH Cost Basis Stable/Rising | Strong Hands Accumulating | Long-term confidence, trend support |
Final Thoughts
Tracking on-chain cost basis gives you a powerful advantage in understanding market cycles, spotting key support/resistance zones, and separating hype from real conviction.
As of June 2025, Bitcoin trades above all major realized prices — suggesting a structurally bullish market with strong demand from both new and seasoned investors.
Use this metric alongside others like NUPL, SOPR, and MVRV to sharpen your trading edge.
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