Bitcoin: Smart money holds, while STHs test the waters – What’s next?

Key Takeaways

Is BTC strong right now?

Yes. LTHs remain in profit, and Bitcoin is holding near $110K.

Will trader confidence return to the market?

Slowly. Leverage is creeping back on Binance, but full speculation hasn’t returned yet.

Bitcoin [BTC] is trading near $110K, with long-term holders (LTHs) sitting on solid gains and leverage returning to Binance [BNB].

Traders see the move as psychological, with $113K acting as a key level that could either cause a breakout or help with another round of resistance-driven selling.

LTHs show no signs of stress yet

The Net Unrealized Profit/Loss (NUPL) for LTHs remains firmly in positive territory, which means that most are still sitting on significant unrealized gains.

Source: Alphractal

This metric acts as a proxy for market confidence among seasoned investors. Despite recent price volatility near $110K, the data shows that long-term conviction remains unshaken.

For this group to experience real financial discomfort, Bitcoin would have to fall below $37K; a level not seen since early 2024.

As it stands, their positioning provides a psychological buffer, reducing the likelihood of panic selling in the current range.

A late cycle phase?

Source: Alphractal

The LTH/STH SOPR ratio has been trending downward, which means that LTHs are reducing their selling activity while STHs continue to attempt to secure profits.

Such divergences have emerged near cycle peaks, as seen in late 2021 and mid-2017.

With the ratio hovering near its lower historical bound, it is obvious that LTHs are showing restraint, leaving room for STHs to dominate short-term price action.

This could cause a brief speculative upswing before broader market momentum resets — much like the pattern seen during previous high-volatility phases.

Source: Alphractal

Additionally, Bitcoin’s STH Realized Price was just below $100K, acting as a crucial short-term support zone. As long as BTC trades above it, STHs stay in profit, keeping near-term sentiment stable.

However, a drop below could invite sharper corrections.

Leverage creeps back in

Leverage activity on Binance is slowly rising again after falling sharply in mid-October.

The estimated leverage ratio climbed from 0.148 to 0.166; a measured return of risk-taking behavior.

This aligns with Bitcoin’s gradual rebound from $104K to just above $110K, which means traders are testing the waters without going all in.

Source: CryptoQuant

Unlike previous spikes, this leverage build-up is controlled, showing limited confidence in near-term upside. The lack of heavy speculation shows the market is still waiting for direction.

If Bitcoin stays above $110K, confidence may slowly return.