Bitcoin’s price movements are far from random. Behind the volatility lies a predictable rhythm shaped by supply dynamics, miner incentives, and investor behavior—especially that of long-term holders (LTHs). As the 2025 halving approaches, on-chain data reveals familiar patterns in two key metrics: LTH Cost Basis and Market Value to Realized Value (MVRV). These indicators not only reflect market sentiment but also serve as leading signals for the next potential bull phase.
Understanding how long-term Bitcoin holders behave across cycles offers a strategic edge for investors aiming to navigate market turns with confidence.
The Cyclical Nature of Bitcoin: Driven by Halving Events
At the heart of Bitcoin’s cyclical behavior is the halving mechanism, which occurs approximately every four years. Each halving cuts the block reward for miners in half, reducing new supply entering the market. This scarcity-driven event historically triggers a chain reaction: reduced selling pressure from miners, increased demand, and eventually, a bull market.
But while halvings set the stage, it's the actions of long-term holders—those who buy and hold BTC for more than 155 days—that often confirm the shift from accumulation to upward momentum.
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What Is LTH Cost Basis—and Why It Matters
The cost basis of long-term holders represents the average price at which they acquired their Bitcoin. It’s a powerful psychological and financial benchmark. When the current market price falls below this level, LTHs are in unrealized loss territory; when it rises above, profits accumulate.
On-chain analysis shows that after each bull run, the LTH cost basis forms a multi-year plateau—a period of relative stability lasting around three years. During this time, short-term volatility doesn’t significantly alter the average acquisition cost of long-term investors.
This plateau was clearly visible post-2017 and post-2021 cycles. After sharp rallies, corrections brought BTC prices down toward or slightly below the LTH cost basis, testing holder resolve. These moments often mark capitulation phases, where weaker hands sell, allowing stronger ones to accumulate.
Now, in the current cycle, we’re seeing a similar pattern. The LTH cost basis has stabilized, forming what appears to be the foundation of the next upward leg. According to on-chain analyst @therationalroot, the 90-day change in cost basis is slowing—a sign that accumulation is maturing and large-scale buying pressure may soon dominate.
“The decrease, observed by the 90-day change, is slowing down, indicating a repetition of past cycles.”
This stabilization suggests that long-term investors have largely finished accumulating at lower prices and are now positioned for growth.
MVRV Ratio: A Signal of Market Undervaluation
Another critical metric for identifying turning points is the MVRV (Market Value to Realized Value) ratio for long-term holders.
- Market Value = Total market cap (current price × circulating supply)
- Realized Value = Sum of all coins valued at their last moved price (a proxy for average cost basis)
When MVRV < 1, the network is collectively underwater—meaning most holders are in loss. Historically, these oversold zones (often marked in green on charts) have been ideal entry points for BTC.
In both the 2015 and 2019 cycles, the MVRV for LTHs dipped below 1 during deep bear markets, signaling extreme undervaluation. From there, sustained rallies followed.
Today, the MVRV for long-term holders sits at 1.28, meaning the market is no longer cheap—but not yet overheated. While the best buying opportunities may have passed, this level confirms that confidence has returned and holders are firmly in profit.
Crucially, this metric has not revisited oversold territory since March 2023, suggesting a structural shift in market health. Even during recent pullbacks, selling pressure from long-term investors has remained low—indicating strong conviction.
👉 See how real-time MVRV and cost basis trends can guide your investment timing.
Comparing Past Cycles: What History Tells Us
Let’s look at how these indicators played out in previous cycles:
- Post-2015 Halving: After MVRV exited the green zone in November 2015, BTC didn’t see another deep undervaluation until late 2018. The bull run launched shortly after.
- Post-2019 Halving: A brief dip below MVRV 1 occurred during the March 2020 “COVID crash,” creating a final accumulation window before the explosive 2021 rally.
- Current Cycle (2024–2025): No significant retest of MVRV < 1 has occurred. Instead, steady appreciation and plateauing cost basis suggest earlier institutional and retail adoption may have smoothed out extreme fear.
This could mean one of two things:
- The market has matured—fewer panic sells, faster recoveries.
- Some froth remains unshaken, potentially delaying a final "last dip" before full-blown mania.
Still, both cost basis stabilization and rising MVRV point in the same direction: the foundation for a bull market is being laid.
The Role of Long-Term Holders in Market Transitions
Long-term holders act as anchors in turbulent markets. Their behavior reflects true conviction because they’re less reactive to short-term noise. When they stop selling during downturns—and especially when they begin accumulating again—it signals confidence in future value.
Recent data shows:
- Minimal movement of coins older than 155 days
- Declining exchange reserves (suggesting coins are being withdrawn and held)
- Rising whale holdings (large entities increasing exposure)
These trends align with historical pre-bull market conditions.
Moreover, the fact that both cost basis and MVRV are mirroring prior cycle patterns strengthens the argument that Bitcoin’s rhythm remains intact—even amid macroeconomic shifts and regulatory developments.
FAQ: Common Questions About Bitcoin LTH Indicators
Q: What defines a long-term holder in Bitcoin analytics?
A: In on-chain analysis, a long-term holder typically refers to an entity holding BTC for more than 155 days. This threshold helps filter out speculative traders and highlight investors with strategic time horizons.
Q: Why is MVRV below 1 considered a buy signal?
A: An MVRV ratio under 1 means Bitcoin’s market value is below its realized value—essentially, most investors are holding at a loss. Historically, such conditions occur at cycle lows and precede major rallies.
Q: Can these indicators predict exact price tops or bottoms?
A: No single metric offers perfect timing. However, when cost basis stabilizes and MVRV exits oversold territory, it increases the probability of sustained upward momentum—especially when aligned with halving cycles.
Q: How reliable is on-chain data compared to traditional technical analysis?
A: On-chain data reflects actual wallet behavior and supply dynamics, making it more objective than chart patterns or sentiment indicators. It works best when combined with other analytical methods.
Q: Is it too late to invest if MVRV is already above 1?
A: Not necessarily. While early entries offer higher upside potential, bull markets often see prices rise several-fold even after leaving deeply undervalued zones.
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Conclusion: A Bullish Framework Built on Data
Bitcoin’s price action may seem chaotic to casual observers, but beneath the surface, long-term holder behavior follows a clear script. The current plateau in LTH cost basis and sustained MVRV above 1 suggest we’re transitioning from accumulation into the early stages of a new growth phase.
With the next halving approaching in 2025, history suggests that patient investors who recognize these patterns early stand to benefit most.
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