Are Bitcoin’s weak hands done selling? BTC shows early signs of recovery

Key Takeaways

Bitcoin short-term holders realized 2.6k BTC in losses as STH MVRV dipped below 1. Long-term holders stayed firm, and Seller Exhaustion hinted that selling pressure may be easing.

Since hitting $124k nearly three weeks ago, Bitcoin [BTC] faced strong downward pressure, hitting a low of $107,270. 

As of this writing, Bitcoin traded at $109,540, up 0.56% in 24 hours. Before these moderate gains, BTC was in a strong downtrend, declining 3.74% monthly.

Naturally, amid this slide, short-term holders started capitulating. And that spelled trouble.

Bitcoin short-term holders are capitulating

According to analyst Burak Kesmeci, Bitcoin’s Short-Term Holder (STH) MVRV fell below 1 after 132 days in profit.

This was the first dip since February, when the ratio stayed under 1 for 58 days. BTC then fell as low as $79k.

Source: Bitcoin Magazine Pro

In fact, a drop below 1 means STHs are sitting at losses. The STH Unrealized Profit/Loss Ratio confirmed this, standing at 0.955.

Source: Checkonchain

On top of that, Realized Losses spiked. STH Realized Loss surged from 623 BTC to 2.6k BTC in just two weeks.

Such capitulation reflects fear-driven exits and adds short-term sell pressure. Yet history shows large STH losses often precede stronger rebounds.

Source: Checkonchain

Historically, a high STH Realized Loss occurs near market bottoms as weak hands get flushed out. This set the stage for stronger hands to accumulate, signaling potential for a rebound.

Long-term conviction holds firm

While STH has turned to aggressive selling, Bitcoin Long-Term Holders (LTHs) stayed steady. According to Checkonchain, LTH’s Sell-side Risk fell sharply after peaking four days ago.

Source: Checkonchain

At press time, this metric was approximately 0.0017, indicating strong market confidence from LTHs, as they prefer holding their positions rather than selling.

Amid declining profit margins, LTHs are not highly incentivized to exit positions, a clear sign of market conviction from the cohort.

Seller exhaustion in play

According to AMBCrypto’s analysis, Bitcoin faced strong downward pressure, which caused STHs to panic-exit the market.

However, it seems they have sold enough and are getting exhausted. In fact, the Seller Exhaustion Constant dipped through August but has started to rise again.

Source: Checkonchain

This pattern often emerges as selling slows, easing pressure and setting the ground for recovery.

As a result, BTC could stabilize and aim for $112k if demand returns. However, if STH selling persists, a slide toward $105,003 remains possible.