- Short-term holders are realizing deep losses, forming a classic late-stage capitulation structure seen before major market turning points.
- On-chain metrics show extreme stress among recent buyers, signaling the exhaustion of weak hands during a late-cycle fear phase.
A wave of panic from short-term holders (STH) has resurfaced, making the Bitcoin market even more gloomy.
The latest data from XWIN Research Japan shows that this group of short-term holders is in a deepening capitulation phase, marked by selling at increasingly steep losses.
Indicator-wise, the STH-SOPR has plunged to around 0.97, a level that typically only appears when selling pressure peaks. This figure has been below the 1.0 threshold for several weeks, seemingly forming a capitulation band that is difficult to ignore.
The situation is reminiscent of times when market participants dumped assets not based on a well-thought-out strategy, but out of fear that clouded reason.
STH Weakness Deepens Amid Mounting Exchange Losses
What makes the situation less benign is the drop in the STH-MVRV below 1, meaning almost all new buyers are taking losses. On the other hand, this pattern rarely lasts long, as selling pressure usually dissipates quickly once the “weak hands” have finished unloading their positions.
However, the situation this time is a bit more complicated. XWIN Research Japan recorded an inflow of around 65,200 BTC into exchanges at a loss, a sign that fear wasn’t just surfacing but was already being reflected in real transactions.
The flow resembled a traditional capitulation phase: unrealized losses mount, panic selling surges, selling pressure reaches saturation, and then strong players begin to scoop up supply.
Not only that, the on-chain momentum we previously highlighted has now dropped into the pessimistic zone. This movement typically indicates the risk of a deeper correction if there is no new buying impetus.
The Composite Index also shows continued weakening market confidence. In fact, short-term holders appear ready to secure their small profits if price pressure increases. Situations like this often feel like a guessing game: will the market rebound or will it sink further?
Bitcoin Sentiment Splits as Bold Forecasts Challenge Market Fear
However, the prevailing opinion is not all gloomy. CNF previously reported that the world’s highest IQ record holder, YoungHoon Kim, actually projected that Bitcoin could reach $220,000 in 45 days and even reach $10 million in ten years.
This bold-sounding prediction presents an interesting contrast amid market anxiety. The question is, is the market truly in the final stages of a correction, or is it actually building the foundation for something bigger?
Furthermore, some analysts believe Bitcoin may have been in a bearish cycle for the past six months. If so, the continued price pressure is not a major surprise.
Meanwhile, as of press time, BTC is changing hands at about $91,392, slightly up 0.28% over the last 24 hours, with $10.77 billion in daily trading volume.