Historically the metric has been one of the most accurate market indicators in Bitcoin, as the relationships between short-term and long-term holders and the acceleration/deceleration of cost basis of the two respective cohorts is quite informative.
The short-term and long-term bitcoin holder cost basis ratio is trending downward, signaling a shift in market conditions.
The bitcoin price short-term holder and long-term holder ratio's 14-day change.
While it is true that short-term holders are still underwater in aggregate (relative to the average cost basis of the cohort) the market absorbed lots of realized losses during the last few months, and with a relative accumulation occurring, the STH LTH Ratio has flipped back bullish.
A backtest of the ratio over time speaks for itself:
The short-term and long-term bitcoin holder cost basis ratio is trending downward, signaling a shift in market conditions.
The bitcoin price short-term and long-term holder ratio's 14-day change.
Below is a view of the inputs that go into the ratio itself:
The short-term and long-term bitcoin holder cost basis ratio is trending downward, signaling a shift in market conditions.
The bitcoin short-term holder and long-term holder realized price.
Similarly, last Wednesday in The Daily Dive #144 we highlighted the bullish flip in the delta gradient, another market momentum metric.