Bitcoin's Short-Term Holder Dynamics and Implications for Near-Term Price Action

The Bitcoin market in late 2025 is defined by a fragile equilibrium between short-term holder (STH) behavior and structural price levels, with on-chain metrics painting a nuanced picture of risk and resilience. As the year draws to a close, the interplay between STH activity and key support/resistance zones offers critical insights into the near-term trajectory of BTC.

STH Dynamics: Accumulation Amidst Bearish Pressures

Bitcoin's short-term holder metrics reveal a market in transition. As of November 2025, 2.8 million BTC held by STHs were underwater, the highest level since the FTX collapse in 2022. This figure underscores the growing bearish sentiment, as the price fell below the STH cost basis (~$112.5K), signaling waning demand for speculative positions. However, the broader picture is not entirely bleak. Despite the downturn, 71% of Bitcoin's supply remains in profit, consistent with mid-cycle corrections. The Relative Unrealized Loss metric at 3.1% further suggests a mild bear phase rather than a deep capitulation, indicating that retail and institutional investors are not yet in full retreat.

Notably, Q4 2025 saw STHs accumulating Bitcoin during price weakness, even as the asset fell from all-time highs of $126,000 to the mid-$80,000 range. This behavior contrasts with the sharp outflows observed in U.S. spot Bitcoin ETFs, which recorded net outflows of $5.5 billion in the quarter. The divergence highlights a shift in investor priorities: while institutional players sought to lock in profits, corporate treasuries and retail buyers quietly added to their holdings, reflecting a growing preference for Bitcoin as a store of value over speculative trading.

Structural Support and Resistance: A Tenuous Balance

Bitcoin's price action in December 2025 has been constrained by a critical range defined by the STH cost basis (~$101.5K–$102.7K) and the True Market Mean (TMM) near $81.3K. The TMM, representing the average on-chain purchase price of active participants, has historically acted as a defensive support level, particularly when combined with the STH cost basis. However, the market's inability to reclaim the 0.75 cost-basis quantile (~$95K) has exposed it to further downward pressure.

The structural fragility is compounded by overhead supply in the $93K–$120K range, which has repeatedly capped recovery attempts. As of late December, 23.7% of Bitcoin's circulating supply was underwater, with 13.5% held by STHs. This dynamic mirrors conditions seen in early 2022, a period that preceded a deeper bearish phase. The 7-day simple moving average of loss-bearing supply reached 6.7 million BTC, a level that historically correlates with increased sell pressure.

On-Chain Risk Indicators and Market Sentiment

On-chain risk indicators reinforce the bearish bias. The Cumulative Volume Delta (CVD) Bias has turned negative on major exchanges, signaling sustained net sell pressure. Meanwhile, the Perpetual Market Directional Premium has declined from $338M/month in April to $118M/month, reflecting a cooling of speculative positioning. These trends are mirrored in derivatives markets, where open interest and funding rates have trended lower, indicating a lack of conviction among traders.

Options markets provide further insight. While front-end volatility has compressed, there has been a noticeable increase in demand for short-dated downside protection, with a 25-delta skew of roughly 11% in the one-week tenor. This defensive positioning suggests anticipation of macroeconomic catalysts, particularly the Federal Reserve's upcoming policy decisions, which could trigger short-term volatility.

Implications for Near-Term Price Action

The convergence of STH dynamics and structural levels points to a range-bound market in the near term. The $81.3K TMM and $88K Active Investors' Realized Price represent key support zones, while the $95K–$102.7K range acts as a critical battleground for buyers. A break below $81.3K could accelerate the liquidation of underwater positions, potentially triggering a deeper correction. Conversely, a sustained rebound above $95K would signal renewed demand and a potential retesting of the $112.5K STH cost basis.

Institutional flows and macroeconomic developments will remain pivotal. The continued outflows from ETFs and the thinning liquidity in spot markets suggest that institutional investors are adopting a risk-averse stance. However, the resilience of corporate treasury accumulation and the stability of Bitcoin's dominance near 60% indicate that long-term confidence remains intact.

Conclusion

Bitcoin's short-term holder dynamics and structural price levels paint a picture of a market in consolidation, with on-chain metrics highlighting both risks and resilience. While the current environment favors caution, the divergence between STH accumulation and institutional profit-taking suggests that the bearish phase may not yet be complete. Investors should closely monitor the interaction between key support levels and macroeconomic catalysts, as these will likely dictate the next phase of Bitcoin's price action.