Bitcoin Price Drops 4% as Short-Term Holders Distribute Coins

Bitcoin's price has experienced a slight cool-off period, currently sitting nearly 4% away from its recent all-time high. This weekend's performance mirrors the typical end-of-week movement in the crypto market. However, recent on-chain observations suggest that a group of investors may be responsible for the sluggishness in Bitcoin's price over the past day, indicating that the bull cycle might be entering its final stages.

Investment data firm Alphractal revealed that Bitcoin short-term holders (STH) are starting to distribute their coins. Short-term holders are known for being the most reactive group of investors, often offloading their holdings following price increases. This on-chain revelation is based on changes in the Bitcoin Supply Held By Short-Term Holders indicator, which tracks the total amount of BTC owned by investors for less than 155 days. This metric has been declining over the past few weeks, signaling ongoing distribution by short-term investors.

Historically, when the supply held by STH witnesses an abrupt decline, the price of Bitcoin is likely near major cycle tops. Reactive investors offload their assets as the price increases, slowing down the coin’s demand. This is considered a classic sign that the bull cycle might be close to its final stages. The Short-Term Holder realized price currently sits at $94,500, acting as the final support level preventing this investor group from going underwater. In contrast, the Long-Term Holder realized price stands at around $33,000, indicating a clear behavioral divergence between long-term and short-term investors.

Despite the STH distribution, Alpractal noted that the Bitcoin price still managed to reach new all-time highs in 2021. Therefore, the market intelligence platform believes that the BTC price still has room for some upside movement. However, macro on-chain signals and the halving cycle pattern suggest a significant correction could begin after October 2025. As of this writing, the price of BTC sits just beneath $109,000, reflecting a 0.4% increase in the past 24 hours and an over 5% increase in the last seven days.