Bitcoin News Today: Bitcoin's Weak Hands Burn 2.6k BTC—Could This Capitulation Signal a Buyer's Opportunity?

Bitcoin short-term holders realized 2.6k BTC in losses as the Short-Term Holder (STH) MVRV ratio dipped below 1, marking the first time since February that the metric has fallen under this threshold. This development indicates that STHs—wallets holding Bitcoin for less than 155 days—are currently sitting in a loss position. The STH Unrealized Profit/Loss Ratio currently stands at 0.955, further confirming this trend [1]. Historically, such dips have often preceded significant market rebounds, as weak hands flush out and stronger buyers step in to accumulate at lower prices [1].

In the past, the STH MVRV ratio staying below 1 for 58 days in February coincided with Bitcoin’s decline to $79,000. The current decline from a peak of $124,000 to a low of $107,270 suggests a similar pattern may be emerging, with a potential floor in sight as weak holders exhaust their selling pressure [1]. Over the past two weeks, STH Realized Losses have surged from 623 BTC to 2.6k BTC, signaling panic exits and adding short-term bearish pressure. However, historical data suggests that such capitulation can also serve as a catalyst for a rebound if stronger buyers take advantage of the dip [1].

Despite the aggressive selling by STHs, Long-Term Holders (LTHs) have remained relatively firm. According to on-chain data, LTHs' Sell-side Risk has dropped significantly after hitting a recent peak, standing at approximately 0.0017 at press time. This indicates strong market confidence from LTHs, who are more inclined to hold rather than sell even amid declining prices [1]. The stability of this cohort suggests that while the market is experiencing short-term volatility, the long-term holders are not panicking, which could help limit further downside.

Additionally, on-chain metrics suggest signs of seller exhaustion. The Seller Exhaustion Constant, which tracks the intensity of selling pressure, dropped through August but has started to rise again, indicating that short-term sellers may be running out of ammunition. This shift in momentum could set the stage for a stabilization in Bitcoin’s price, with a potential rally toward $112,000 if demand returns [1]. However, should STH selling persist, the risk of a further decline toward $105,000 remains.

In parallel, on-chain analysis from Glassnode shows that Bitcoin is currently experiencing broad distribution across all wallet size groups, particularly in the 10–100 BTC cohort. Smaller holders (0–1 BTC) have been accumulating since the peak, while 1–10 BTC wallets resumed buying below $107,000. However, the 10–100 BTC group shifted to net sellers after the price crossed $118,000, reflecting a more bearish outlook among mid-sized investors [2]. This synchronized sell-side pressure raises concerns about Bitcoin's ability to maintain current levels, particularly as the $105,000 support level becomes increasingly critical.

Seasonal trends also suggest a higher likelihood of continued weakness through late August and early September, a period historically associated with softer risk appetite and profit-taking behavior. This "ghost month" has seen an average decline of 21.7% in Bitcoin’s price since 2017, with particularly sharp drops in 2017 and 2021. Given these historical patterns and the current on-chain dynamics, a retreat toward the $105,000–$100,000 range remains a realistic scenario [2].

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] Bitcoin holders 'distribute' as $105K becomes BTC's last support (https://www.coinglass.com/ru/news/541708)