【Four-Year Cycle Total Engraving Series (16)】

【Four-Year Cycle Total Engraving Series (15)】

In June 2015, after this indicator peaked, it took 916 days to reach the bull peak.
In March 2019, after this indicator peaked, it took 954 days to reach the bull peak.
In January 2023, after this indicator peaked, it took 1002 days to reach $126k.

The black line in the chart represents the BTC price; the blue line represents the ratio of the "average purchase price of Bitcoin long-term holders" to the "average purchase price of Bitcoin short-term holders."

The average purchase price of long-term Bitcoin holders (LTH, typically referring to investors holding for more than 155 days) compared to short-term holders (STH, typically referring to investors holding for less than 155 days), expressed as (LTH Realized Price / STH Realized Price), mainly reflects the relative cost basis differences among different holder groups in the Bitcoin market, thereby revealing market cycle phases, investor sentiment, and potential reversal signals.

A lower ratio: Indicates that the average cost of long-term holders is lower relative to short-term holders, which usually occurs in the later stages of a bull market or at the peak. At this time, short-term holders (often new entrants) buy at higher prices, leading to their higher cost basis, while long-term holders hold at lower costs. This situation reflects an overheated market, strong demand but insufficient supply, and may signal an impending price correction or a transition into a bear market, as new participants are likely to capitulate in price fluctuations.

A higher ratio: Indicates that the average cost of long-term holders is higher relative to short-term holders, commonly seen at the bottoms of bear markets or in recovery stages. Short-term holders may buy at lower prices (for example, after panic selling), while long-term holders have a relatively higher cost basis (due to their earlier purchases). This reflects that market capitulation behavior is occurring, with recent participants realizing losses, and the market may enter an accumulation phase, signaling a potential upward reversal until prices exceed the cost of short-term holders or long-term holder groups adjust.

Changes in LTH/STH can serve as indicators for assessing market health and the distribution of holder behavior, helping to determine whether one is in a state of excessive optimism or panic.