Bitcoin News Today: Market Psychology Shakes as Short-Term Holders Cut Bitcoin Losses

Bitcoin’s short-term holders (STHs) have again started realizing losses, the first time this has occurred since January 2025. This event mirrors a prior correction period that marked the most significant drawdown in the current market cycle. On-chain data from CryptoQuant indicates that the STH-SOPR (Spent Output Profit Ratio) multiples have dropped below 1 for the first time in over six months, signaling that STHs are selling at a loss [1].

Over the past few weeks, Bitcoin has retraced from its recent all-time high of $124,290 to roughly $113,423. During this correction, more than 20,000 BTC—held for less than 155 days—were moved to exchanges at a loss. This activity is a sign of short-term speculative behavior, where traders are reacting to price volatility by offloading positions. According to Glassnode, the volume of BTC sent to exchanges at a loss was particularly concentrated in the last three days of the downturn [2].

Historically, such loss realizations have two possible outcomes. One is a weakening of market momentum, as extended selling pressures can lead to deeper corrections. The other is a healthier reset, where weaker hands are flushed out, potentially paving the way for a more sustainable rally. The impact of this current event will likely depend on how quickly the market absorbs the sell-off. If bulls manage to stabilize the price, it could mirror previous resets that led to strong rebounds. However, if the downward momentum continues, further bearish price action may follow [1].

On a more positive note, some analysts point to early signs of buyer interest. The exchange netflow for Bitcoin, which measures the difference between BTC entering and exiting exchanges, has become more negative—indicating that more BTC is being bought than sold on centralized exchanges. This trend suggests traders are buying the dip in anticipation of a potential recovery [1].

The market’s consolidation phase is currently defined by a tight trading range between key resistance levels above $120,000 and support levels below $115,000. According to analyst Dean Chen of Bitunix, if Bitcoin struggles to break above $120,000, it may test the $112,000–$114,000 range, while maintaining control above this level could lead to another rally toward the resistance [7]. The broader market context, including the outcome of Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole Economic Symposium, will also play a critical role in determining the next direction for Bitcoin [7].

Meanwhile, the broader cryptocurrency market has seen a pullback after hitting record highs. Ethereum, the second-largest cryptocurrency by market capitalization, has also declined, falling to $4,350 from its peak just under $4,900. This correction comes after a week of heavy profit-taking and liquidation of long futures positions, according to data from CoinGlass [7].

The STH sell-off has implications for the overall market psychology, as it highlights increased caution among investors. This behavior is consistent with prior cycles where short-term holders panic-sell during dips, often resulting in temporary price instability. However, long-term holders (LTHs) remain a stabilizing force, as they tend to accumulate during such corrections [2].

In summary, Bitcoin’s current situation reflects a critical juncture in the market cycle. The behavior of STHs, combined with macroeconomic factors such as expectations for Federal Reserve policy, will likely determine whether the price consolidates or enters a more sustained downturn. Analysts remain divided on the outcome, with some viewing the current correction as a necessary phase to eliminate weaker participants and others warning of further downside if market conditions deteriorate. Investors are closely monitoring key technical levels and on-chain indicators for signs of a potential reversal [1].

Source:

[1] Bitcoin STHs Realize Losses for First Time Since January (https://cryptopotato.com/bitcoin-sths-realize-losses-for-first-time-since-january-impact-on-btc-price/)

[2] Short-term Bitcoin Holders Panic Sell 20K BTC This Week (https://cointelegraph.com/news/will-bitcoin-price-fall-to-110k-short-term-holders-sell-22k-btc-at-a-loss)

[3] Bitcoin Market In Equilibrium: No Major Flow Between Old (https://bitcoinist.com/bitcoin-market-equilibrium-no-flow-old-young-coins/)

[4] Bitcoin vs. Ethereum: The Complete Guide (2025) - Supra (https://supra.com/academy/bitcoin-vs-ethereum/)

[5] Bitcoin vs. Ethereum: Which Cryptocurrency Is the Best (https://finance.yahoo.com/news/bitcoin-vs-ethereum-cryptocurrency-best-125000570.html)

[6] Bitcoin, Ethereum Slip as Crypto Markets Pull Back After Hitting (https://finance.yahoo.com/news/bitcoin-ethereum-slip-as-crypto-markets-pull-back-after-hitting-2025-highs-155818704.html)

[7] Bitcoin Price, BTC Price, Live Charts, and Marketcap (https://www.coinbase.com/price/bitcoin)