Bitcoin News Today: Bitcoin's STH Floor Cracks—A Correction's Imminent Trigger?

Bitcoin is at a critical juncture as it inches closer to a potential deeper correction if it fails to hold above the key level of $106,000, which represents the average acquisition cost of short-term holders (STHs). STHs are investors who have acquired Bitcoin within the last 155 days and are often more prone to selling in response to price volatility. A rising STH supply typically reflects growing market enthusiasm, but when price momentum stalls, it can signal a correction as speculative demand wanes [1].

Recent on-chain data suggests that the current market dynamics indicate a lighter appetite for Bitcoin among new investors. According to Glassnode On-Chain data, Bitcoin’s price surged past $124,000 earlier this year but has since fallen nearly 10%. One key reason is the slowing pace of capital inflows compared to previous all-time highs. During the March and December 2024 price spikes, the realized cap increased by around 13% per month, whereas in the current environment, it has only grown by approximately 6% per month [3]. This discrepancy highlights a reduced level of buying interest and hints at a potential bearish turn.

The Short-Term Holder Realized Price (STH RP), which reflects the average price at which recent buyers acquired Bitcoin, is currently sitting at around $108,600. If the price falls below this level, it could trigger a more pronounced correction, as this area has historically acted as a floor during periods of market stress. For instance, in April, Bitcoin hit a cycle low at $76,000 following the announcement of new tariffs by President Trump, and it rebounded from the STH RP level [3]. However, if this critical support is breached, it could open the door for a retest of earlier levels like $98,200 or even the $75,000 handle [3].

From a technical standpoint, Bitcoin has recently broken through a long-term ascending trendline that had been in place since the April lows. This break could signal the start of a broader retracement. On the four-hour chart, Bitcoin is currently testing a descending trendline, and if it breaks below $112,353, a retest of the STH RP is likely. The market is closely watching whether this level holds, as a successful defense could pave the way for a new bullish phase. A breakdown, however, could prolong the downward move [3].

Client sentiment data from OANDA also adds to the bearish outlook. An overwhelming 98% of traders are net-long on Bitcoin, a figure that often signals a potential correction. In such crowded conditions, a sharp reversal is more likely as traders rush to book profits or cut losses [3]. Additionally, the recent drop in Bitcoin ETF inflows—despite the total amount in crypto funds reaching record highs—suggests that investor optimism is tempered by caution, particularly as new speculative interest appears to be waning [3].

On-chain metrics like the MVRV Z-Score also reflect a mixed market sentiment. The MVRV Z-Score, which measures the ratio of market value to realized value, has moved into a zone that historically has been associated with overvaluation. A high MVRV Z-Score typically indicates that the market cap is significantly above the realized cap, suggesting that the price may not be fully supported by intrinsic value [4]. If this metric continues to trend higher, it could reinforce the bearish case, particularly if Bitcoin fails to maintain support at key levels.

Overall, while Bitcoin remains in a long-term bull cycle, the short-term outlook is increasingly bearish due to a combination of weak on-chain signals, high trader sentiment, and a lack of sustained capital inflows. Market participants should closely monitor Bitcoin’s ability to hold above $106,000 and the STH RP level as these will be key determinants of the next major price move.

Source: [1] Bitcoin Short Term Holder Supply (https://newhedge.io/bitcoin/short-term-holder-supply) [2] Bitcoin Short Term Holder MVRV (STH-MVRV) Chart (https://newhedge.io/bitcoin/mvrv-sth) [3] Bitcoin (BTC/USD) Price Outlook: Mixed Signals as Bearish ... (https://www.marketpulse.com/markets/bitcoin-btcusd-price-outlook-mixed-signals-as-bearish-potential-grows-108600-may-hold-the-key/) [4] Bitcoin MVRV Z-Score Chart (https://newhedge.io/bitcoin/mvrv-z-score) [5] Bitcoin Price Forecast: Is a 20% Correction Looming After ... (https://www.fxempire.com/forecasts/article/bitcoin-price-forecast-is-a-20-correction-looming-after-2021-style-top-1542035) [6] Asia Morning Briefing: BTC Demand Cools While 'Crypto ... (https://www.coindesk.com/markets/2025/08/21/asia-morning-briefing-btc-demand-cools-while-crypto-capital-is-getting-more-selective-okx-s-gracie-lin-warns)