Bitcoin News Today: Bitcoin Short-Term Gains Plunge 232% to 13% as Volatility Erodes Profits

Bitcoin’s short-term holders are facing a sharp decline in unrealized profits, with gains collapsing from historic highs of 232% in 2012 and 150% in 2021 to just 13% in the current cycle, according to on-chain data from CryptoQuant [1]. This group—wallets holding Bitcoin for one to three months—typically reflects spot market sentiment, but their current position suggests a fragile equilibrium as prices hover near record levels. Despite Bitcoin trading above $118,000—less than 3% below its all-time high—these traders now face significantly reduced margins. Gains for this cohort peaked at 69% but have since eroded rapidly, raising concerns about potential selling pressures [1].

The average realized price for these wallets is approximately $104,000, indicating many entered the market near cycle highs. This narrow profit cushion leaves them highly vulnerable to volatility, though mass capitulation has not yet materialized. Historical patterns show that such shakeouts often precede local market bottoms, attracting strategic buyers during temporary dips. However, further losses could force short-term holders to cut losses, potentially deepening downward momentum [1].

Institutional analysts have flagged a possible tactical pause in Bitcoin’s rally amid overlapping macroeconomic events. Matrixport noted that traders may confront a “wave of market-moving events” this week, including peak U.S. earnings season, a White House report on digital assets, and the Federal Reserve’s rate decision [1]. While optimism remains widespread, historical trends suggest caution. August and September have historically been weak months for Bitcoin, averaging near-zero returns and positive performance in only three of the past ten years. These factors could prompt profit-taking or sideways consolidation ahead of year-end momentum [1].

The contrast between Bitcoin’s record highs and short-term gains underscores diverging narratives within the crypto market. Long-term holders, who control a significant portion of Bitcoin’s supply, continue to benefit from sustained price appreciation. Short-term traders, often retail participants seeking quick profits, face sharper drawdowns. This dynamic highlights the challenge of balancing speculative demand with institutional-grade stability [1].

CryptoQuant’s analysis also underscores the evolving nature of Bitcoin’s market structure. Previous peaks in 2012 and 2021 saw long-term holders reap outsized rewards, but the current environment appears more fragmented. The 13% unrealized gain marks a stark departure from past cycles, signaling potential shifts in market participation or risk tolerance. While the broader outlook remains positive heading into year-end, near-term volatility could test the resilience of both retail and institutional players [1].

As the market navigates regulatory scrutiny and macroeconomic uncertainty, the interplay between short-term and long-term investors will remain a critical focal point. A tactical pause may provide clarity before Bitcoin resumes its longer-term uptrend, but the risks of short-term instability persist.

Source: [1] [From 232% to 13%: What Happened to Bitcoin’s Short-Term Gains?][https://coinmarketcap.com/community/articles/6887a0b53c1f324d51532fed/], [From 232% to 13%: What Happened to Bitcoin’s Short-Term Gains?][https://cryptopotato.com/from-232-to-13-what-happened-to-bitcoins-short-term-gains/]