Key Takeaways:
On-chain data shows Bitcoin's long-term versus short-term holder cost basis gap widening, signaling the bear market has further to run.
Bitcoin traded at $66,518 on June 13 as on-chain analysts warned the widening gap between long-term and short-term holder cost bases suggests the bear market is far from over.
"The divergence between long-term holder and short-term holder cost bases has not yet compressed to levels seen at prior cycle bottoms, suggesting recent price action may be a bull trap," the analysts said in a June 13 report.
The LTH-STH gap measures the difference between the average acquisition price of wallets that have held Bitcoin for at least 155 days versus those that have held for less. When the gap narrows significantly, it has historically signaled that the market is approaching a cycle bottom. The current reading remains elevated relative to prior bear market troughs, indicating that sufficient capitulation has not yet occurred.
If the bull trap thesis proves correct, Bitcoin could retest the $60,000 level and potentially slide toward the $48,000-to-$54,000 range that represents the bear case floor, according to recent model projections. The $62,000 level serves as the immediate line in the sand — a daily close below that threshold would open the path toward lower support zones.
The metric has historically been one of the more reliable on-chain signals for identifying bear market exhaustion. At the 2022 cycle bottom near $15,500, the LTH-STH cost basis gap had compressed to roughly $3,000. The current gap, while narrower than its 2024 peak, remains substantially wider than that threshold, implying that the market has not yet experienced the full washout typical of prior cycles.
Bitcoin's relative strength index sat at 44.75 as of June 13, with the signal line at 28.73 — a 16-point gap that shows momentum recovering from deeply oversold territory. While that divergence supports the case for a near-term bounce, analysts cautioned that RSI recovery alone does not confirm a cycle bottom without corresponding compression in the LTH-STH gap.
The $70,000-to-$72,000 zone represents the first major resistance overhead, where trapped supply from the May breakdown sits. Clearing that level on volume would open sight lines toward $80,000 and potentially the $92,000-to-$98,000 bull case range. But failure to hold $62,000 as support would validate the bearish thesis and shift focus to the $54,000 level as the next downside target.
Open interest and funding rate data will be critical to watch in the coming days. A sustained decline in OI alongside negative funding would suggest long positions are being flushed out — a necessary condition, though not sufficient, for a durable bottom.
This article is for informational purposes only and does not constitute investment advice.
