Bitcoin Drops 8% as Short-Term Holders Sell at Loss

Bitcoin's recent price movements have caused significant concern among short-term holders (STHs), who are now selling at a loss. After reaching a high of $112,000 ten days ago, Bitcoin faced strong rejection and dipped to a low of $103,000. This price drop has negatively impacted the profitability of STHs, particularly those who bought above $104,000, as they now face mounting unrealized losses.

According to CryptoQuant analyst Frost, Bitcoin’s STH SOPR (Spent Output Profit Ratio) has dipped below 1 while BTC holds above $100,000, indicating that recent buyers are closing positions at a loss. At the time of reporting, the SOPR was at 0.99, confirming that short-term holders are selling aggressively. Bitcoin’s Average Dormancy has dropped sharply to 8.5, suggesting that younger coins are being spent more than older ones, which indicates that most of the selling pressure is coming from STHs.

Despite the selling pressure, analyst Frost remains optimistic. He notes that the recent drop in STH SOPR means all available short-term profits have been absorbed, signaling that selling pressure may be exhausted at this level. Since STHs are highly reactive to market moves, this could support a bullish continuation. As losses mount, selling becomes unsustainable, making holders more likely to accumulate and hold rather than sell at a loss.

The declining SOPR and low average dormancy suggest that STHs panicked and sold as Bitcoin fell. This recent dip has been largely driven by STHs fearing a further decline. If they continue selling aggressively, BTC may drop even more. To sustain bullish momentum, the market must restore confidence among STHs, as upward trends rely on positive sentiment and unrealized profits.

To sustain momentum, Bitcoin must stay above key short-term holder (STH) realized price levels. The main support sits at $104.2K, with a lower boundary at $96.9K. At these levels, critical STH price metrics converge, including the STH 1W–1M Realized Price, the STH Realized Price, and the STH 3M–6M Realized Price. Since BTC is holding above $104.2K, a continued price decline is unlikely, as STHs will be incentivized to hold rather than sell. Clusters above this level have minimal impact on future trends. However, if BTC falls below $104K, it must stay above $96.9K for stability. Failing to hold these levels could erase May’s gains, pushing BTC down to Trump-tariff levels.