Cryptoquant analyst Darkfost says Bitcoin has flashed a rare end of bear market signal, but CoinGlass data suggests BTC will revisit the $62K liquidity zone.
A rare Bitcoin signal that has appeared near the end of previous bear markets is back again. After a three-day confirmation, CryptoQuant says the market is entering its final bear phase. But liquidation data still points to a possible drop toward $62,000 before the next rally begins.
CryptoQuant analyst Darkfost says Bitcoin may be entering the final stage of its current bear market after a rare on-chain signal appeared for the first time in months.
His analysis shows that short-term holders now have a lower average cost basis than long-term holders. This happened after the same pattern stayed in place for three days.
Darkfost said this has happened several times before. In the past, it usually appeared when Bitcoin was close to finishing its bear market. However, he also said this does not mean Bitcoin has already reached its lowest price.
Instead, it shows that many long-term investors have started buying Bitcoin little by little while prices are still low.
According to Darkfost, the next strong bullish sign will come when new buyers once again start buying Bitcoin at higher prices than long-term holders.
According to Darkfost, one thing has repeated in almost every Bitcoin cycle, that is, how investors react during a market decline.
Even after the launch of spot Bitcoin ETFs and growing interest from institutions, traders are behaving much like they did in earlier cycles.
During the last nine months, short-term holders continued buying Bitcoin as prices fell. As a result, their average buying price dropped from $112,500 to around $69,000.
When new investors keep buying during a correction, their average buying price slowly falls below that of long-term holders. Darkfost said this pattern has appeared before several major Bitcoin recoveries.
It doesn't guarantee that Bitcoin will rally immediately, but it shows that selling pressure is slowing while buyers continue adding coins.
While the long-term picture is improving, short-term trading data tells a different story.
According to another crypto trader, The Martini Guy, CoinGlass liquidation heatmaps across the 24-hour, one-week, and one-month timeframes point to the same trend.
There is still a large pool of liquidation liquidity above Bitcoin around the $65,000-$66,000 area. However, Bitcoin has tried several times to move into that zone but has failed.
At the same time, more liquidity is building below the current price, especially near $62,000.
According to the analyst, Bitcoin often moves toward areas where the most liquidity is waiting. Because of that, he believes the market could first drop toward the $62,000 level before trying another move higher.
One positive sign is that Bitcoin's latest recovery is not being supported by excessive leverage.
Although open interest has recovered after the recent market shakeout, it is still much lower than the highs seen earlier in this cycle. This suggests traders are still being careful instead of opening large leveraged positions.
As of press time, Bitcoin was trading at around $64,619, up nearly 1% over the past 24 hours.
While Darkfost's on-chain data suggests the market may be nearing the end of its bear phase, crypto trader The Martini Guy believes Bitcoin could still see a short-term dip to shake out weak hands before a stronger bullish move begins.
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