Bitcoin News Today: Bitcoin's STHs Near Capitulation as LTHs Dig In for the Long Haul

Bitcoin has shown early signs of stabilization after a prolonged period of selling pressure from short-term holders. Data indicates that the market may be entering a phase of exhaustion among weak hands, with potential for a rebound if demand picks up. Short-term holders (STHs), who have seen significant unrealized losses, are starting to exit their positions. According to on-chain analytics, the STH MVRV ratio dropped below 1 after 132 days in profit, the first such decline since February. This marks a key psychological level where holders are in negative territory, as the STH Unrealized Profit/Loss Ratio stands at 0.955 [1]. Over the past two weeks, realized losses surged from 623 BTC to 2.6k BTC, a sharp increase attributed to fear-driven exits [1]. Historically, such capitulation has coincided with market bottoms, often setting the stage for accumulation by stronger hands and a potential recovery [1].

Long-term holders (LTHs), by contrast, have maintained a more stable outlook. The Sell-side Risk for LTHs has sharply declined from a recent peak, currently at approximately 0.0017, signaling a strong preference for holding rather than selling [1]. This behavior suggests a degree of market conviction from a cohort that is less sensitive to short-term price fluctuations. Despite ongoing downward pressure, LTHs have not been incentivized to exit, further supporting the idea that the market is stabilizing [1].

The broader on-chain data also reveals a shift in market dynamics. According to AMBCrypto’s analysis, Bitcoin’s Seller Exhaustion Constant has begun to rise after months of decline [1]. This indicator often signals the end of a selling phase, with lower pressure potentially allowing the market to consolidate and test key resistance levels. If this trend continues, Bitcoin could stabilize around $112,000. However, the risk of further declines to $105,003 remains if STH selling persists [1].

In contrast to the short-term selling, LTHs have realized significant profits in the current cycle. Since the start of 2024, LTHs have realized 3.27 million BTC in profits, surpassing the 2021 bull run and only trailing the 2017 cycle’s 3.93 million BTC [2]. This reflects elevated sell-side pressure and suggests the market may be in the late phase of a bullish cycle. Notably, the increased liquidity has been driven by movements of legacy coins, listings at platforms like Galaxy, and renewed ETF activity. Roughly 100,000 BTC has become available for sale, highlighting the depth of the market and the role of ETFs in facilitating capital rotation [2].

Despite these signs of market strength, the path ahead remains uncertain. While LTHs have shown resilience, the continued listing of large quantities of BTC on exchanges indicates ongoing supply pressure. The interplay between these two groups—capitulating STHs and stable LTHs—will be a key factor in determining whether Bitcoin’s current correction is a temporary dip or the start of a more sustained downtrend. For now, the balance of power appears to be shifting, with STH selling showing signs of slowing, and LTHs maintaining a firm grip on their positions [1].

Source:

[1] Are Bitcoin's Weak Hands Done Selling? BTC Shows Early Signs of Recovery (https://ambcrypto.com/are-bitcoins-weak-hands-done-selling-btc-shows-early-signs-of-recovery/)

[2] BTC Long-Term Holders Realize 3.27M BTC in Profits (https://www.coindesk.com/markets/2025/08/27/bitcoin-long-term-holders-have-realized-profits-of-3-27m-btc-this-cycle-exceeding-2021-cycle)