Bitcoin Slams Through Key Levels

Dear Bitcoiners,

Bitcoin is slamming through key levels, most importantly breaking back above the Short-Term Holder Cost Basis, one of the most important on-chain levels for differentiating between bull and bear market conditions.

Over the past weeks, we’ve been discussing how STH Momentum has been forming higher lows and how the next bull market might be closer than most think. As I’ve mentioned, the last day of the bear market is also the first day of the bull market!

Last week, we provided very important evidence around the main driver of this cycle, institutional demand: an institutional bullish divergence. While Bitcoin’s price declined, institutional ETF holdings increased. Institutional adoption remained surprisingly strong during this bottom formation.

In last week’s live appearance on Roxom, I also discussed how the Digital Credit stress test might have marked this cycle’s low, while Bitcoin was still undergoing its time capitulation. We looked at how the STH Cost Basis was trending down while price kept moving sideways, and I expected Bitcoin to keep pushing against this level and break through within the next two months. But here we are, instead of it taking two months, it only took a week.

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After the Coldcard hack and BIP-110 chain split, it was becoming difficult to find another Bitcoin-specific catalyst capable of pushing price significantly lower. However, based on the 4-year cycle, we still had potentially 2 months left to form a bottom. We therefore needed to stay grounded, and couldn’t entirely rule out one more leg down.

Today, however, the market is breaking through key levels and giving us new information.

Go to live chart

👉 Key Insight: Breaking this decisively through the key resistance levels has historically marked the end of the bear market.

But there are some important caveats. Next, we’ll compare this breakout to previous cycles, discuss whether the bottom is really in, and the role institutional demand is playing here.