On-chain data shows the Bitcoin short-term holders have been transferring large amounts to exchanges at a loss following BTC’s bearish action.
Bitcoin Short-Term Holders Are Participating In Loss-Taking
In a new post on X, CryptoQuant community analyst Maartunn has talked about the reaction to the recent Bitcoin price decline from the short-term holders (STHs).
The STHs refer to the BTC holders who purchased their coins within the past 155 days. Statistically, the longer an investor holds their coins, the less likely they become to sell them in the future. As such, the STHs with their relatively low amount of holding time are considered to represent the weak hands of the market.
Like usual, this cohort has also panicked in the face of the latest price volatility. Below is the chart shared by Maartunn that shows the trend in the loss transactions made by the cohort’s members to wallets connected with centralized exchanges.
Looks like the value of the metric has witnessed two sharp spikes in recent days | Source: @Maartun on X
From the graph, it’s apparent that the Bitcoin STHs deposited nearly 32,000 BTC at a loss to exchanges during the crash from earlier in the week. Generally, holders transfer their coins to exchanges when they want to make use of one of the services that they provide, which can include selling.
Considering the nature of the STHs, these loss deposits were likely made with distribution in mind. Thus, these investors reacted to the plummet by capitulating.
The latest decline in BTC’s price to levels under $109,000 has been met with a similar reaction, with the 24-hour value of the metric hitting the 29,700 tokens mark.
In total, the STHs have participated in capitulation of more than 60,000 BTC, worth a whopping $6.5 billion, across these two loss-taking waves. “That’s a clear sign of heavy stress across the market,” notes the analyst.
In some other news, CryptoQuant’s Bitcoin Bull-Bear Market Cycle Indicator is flashing a “bear” signal for the cryptocurrency, as Maartunn has pointed out in another X post.
The data of the CryptoQuant BTC Bull-Bear Market Cycle Indicator over the past decade | Source: @JA_Maartun on X
The Bitcoin Bull-Bear Market Cycle Indicator uses the data of several popular on-chain metrics to determine what phase of the cycle the asset is currently in. According to the indicator, BTC is in a bearish phase at the moment.
The 365-day moving average (MA) of the metric has also been on the way down for a while now, which also doesn’t tend to be a positive signal. “Historically, most BTC gains happen when this metric is rising, not falling,” explains the analyst.
BTC Price
Bitcoin has come down to the $108,900 level following a decline of more than 5.5%.
The trend in the price of the coin over the last five days | Source: BTCUSDT on TradingView
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