Bitcoin's Cyclical LTH Bottom Signals Structural Sell-Pressure Easing

The evolution of Bitcoin's market structure in late 2025 offers a compelling narrative of cyclical rebalancing. At the heart of this story lies the behavior of long-term holders (LTHs), whose on-chain activity has long served as a barometer for structural shifts in the market. According to a report by Coindesk, Bitcoin's LTH supply reached a cyclical low in November 2025, coinciding with a price bottom near $80,000, suggesting that the most intense phase of spot-driven sell pressure from seasoned holders has largely abated. This development marks a critical inflection point, signaling a transition from aggressive distribution to a more measured approach by LTHs, a departure from the explosive blow-off tops observed in prior cycles.

The data reveals a nuanced interplay between on-chain distribution patterns and broader market dynamics. Since July 2025, LTH supply has contracted by approximately 300,000 BTC, declining from 14.7 million to 14.4 million BTC as holders offloaded coins amid a weakening price trend. This reduction, however, appears to have exhausted the immediate wave of selling pressure. The stabilization of LTH supply, coupled with early signs of an upturn, indicates a significant easing in structural sell pressure-a phenomenon historically associated with the onset of accumulation phases as noted by Bitcoin Magazine.

Yet, the market remains in a fragile equilibrium. Bitcoin's inability to reclaim the short-term holder (STH) cost basis of approximately $112.5K has left the price range-bound near $100K, reflecting fading demand and the exhaustion of the previous bullish momentum according to Glassnode data. On-chain metrics underscore this fragility: the STH realized profit/loss (P/L) ratio has plummeted to 0.07x, a stark indicator of overwhelming loss dominance and evaporating liquidity as reported by Yahoo Finance. Meanwhile, the LTH P/L ratio, though still positive at 408x, suggests that continued liquidity compression could trigger a deeper bear market if structural selling resumes as observed in market data.

Historical precedents provide a framework for interpreting these signals. As noted by Bitcoin Magazine, Bitcoin has historically found support at the STH realized price of $113K, with sustained consolidation at this level often preceding renewed accumulation phases. The current price action near $100K, however, falls short of this critical threshold, leaving the market in a defensive posture. Projections based on MVRV ratio band targets suggest potential resistance zones in the $160K–$200K range for the remainder of 2025 as detailed in market analysis, but these remain aspirational until fresh demand materializes.

Off-chain indicators reinforce the cautionary tone. U.S. spot ETFs have recorded consistent outflows, while spot capitalization derivatives (CVDs) reflect sustained sell pressure as reported by Glassnode. The derivatives market, too, has shifted to a neutral stance, with perpetual funding rates turning negative and leveraged long exposure retreating as observed in market data. These developments suggest a broad-based recalibration of risk appetite, though the immediate risk of an extended bearish collapse appears lower than during the recent downturn according to market analysis.

In sum, the cyclical bottoming of Bitcoin's LTH supply signals a pivotal shift in market structure. While structural sell pressure has eased, the absence of robust buying interest and the fragility of key on-chain metrics mean the market remains in a defensive consolidation phase. Investors must now weigh the potential for renewed accumulation against the risks of liquidity compression. As the year draws to a close, the critical question is whether Bitcoin can reclaim its STH cost basis-a threshold that has historically demarcated the end of bearish phases and the beginning of new bullish cycles.