Bitcoin Reclaims Short-Term Holder Cost Basis, Exits Capitulation Phase

Bitcoin has exited a capitulation phase and entered a transition period after reclaiming the average cost basis of short-term holders, according to a CryptoQuant analysis.

CryptoQuant contributor Crazzyblockk wrote on Aug. 24 that Bitcoin climbed from the low-$60,000 range to about $77,000 in five trading days, retaking the short-term holder realized price, or STH Realized Price, at $67,000 to $69,000. Bitcoin had traded below that band throughout July, leaving many recent buyers under water. The cryptocurrency broke back above the range on Aug. 19 and Aug. 20, the first change in market direction since May.

Selling by long-term holders also remained limited. As Bitcoin fell to about $59,700 in June, the long-term holder realized price, or LTH Realized Price, held near $49,200. Crazzyblockk said the decline in the long-term holder realized price was smaller than in past examples from the same stage of the cycle, suggesting there has been no structural wave of large-scale selling by long-term holders.

Bitcoin has now climbed to around its True Market Mean Price of $76,500. Above that, the Active Realized Price stands at about $83,800. The short-term holder +0.5 standard deviation price band is also near $83,000. If Bitcoin breaks above that level, the next major price zone would be the untested +1 standard deviation band at about $98,000.

The rebound does not yet signal the start of a full-fledged bull market. Sharp early rallies after a prolonged correction can be driven more by leveraged liquidations and short covering than by sustained spot buying. Profit-taking by short-term holders may also add pressure, potentially keeping volatility elevated for now.

The next key test is whether the $67,000 to $69,000 short-term holder realized price range can hold as support. Even if Bitcoin retests that band, it would need to stay above it and then recover the one-year holder realized price near $104,800 to confirm a structural trend reversal, Crazzyblockk wrote. He added that Bitcoin has moved out of capitulation and into a volatile transition stage, with room for further gains but a path that is unlikely to be smooth.