Bitcoin Cost Basis Convergence tracks three separate cost-basis lines simultaneously: the Short-Term Holder (STH) Cost Basis, the Long-Term Holder (LTH) Cost Basis, and the Market Realized Price, which represents the aggregate price the entire network paid for its Bitcoin. The chart measures the spread between these three cohorts and highlights the moments when they compress toward one another, converging within roughly 5-10% of each other.
Read the chart by watching the gap between the three lines rather than any single line in isolation. In normal conditions, short-term holders sit at a very different cost basis than long-term holders, and the three lines fan apart. When they draw together and cluster at a similar level, it signals that recent buyers and seasoned holders are underwater or break-even at nearly the same price, indicating extreme market equilibrium across every cohort at once.
Use convergence as a bottom-timing signal. Historically, the windows where STH Cost Basis, LTH Cost Basis, and Market Realized Price align within 5-10% have marked generational Bitcoin market bottoms and exceptional accumulation opportunities, because cohort-wide equilibrium tends to appear only when selling pressure is nearly exhausted.
Check the selected asset, units, and cohort before comparing readings. Compare the metric over consistent dates and use related measures to understand what contributes to a change.
