Traditional U.S. investors have been reducing their exposure to Bitcoin, selling through fund managers after the asset failed to deliver meaningful gains in recent weeks.
These exits have largely occurred via U.S. Spot Bitcoin exchange-traded funds (ETFs), which recorded their largest single-week net outflows of $1.33 billion—the highest level since February 2025.
Such large outflows typically tilt market sentiment toward a bearish outlook. However, Bitcoin has remained relatively resilient, supported by activity from short-term holders.
This raises a key question: can STH sustain this pattern as traditional investors continue to offload their positions?
Short-term holders near profitability
Signs of a gradual shift in sentiment among Bitcoin [BTC] short-term holders emerged, particularly through changes in Coin Age Bands, which point to a transition toward longer-term holding behavior.
This shift coincided with improving profitability among STH. The Short-Term Holder Spent Output Profit Ratio (STH SOPR), which measures whether this group is selling at a profit or loss, signaled that profitability was within reach.
The STH SOPR uses the level of 1 as a neutral benchmark. Readings above 1 indicate profit-taking, while values below suggest losses. The distance from this level reflects the depth of profit or loss.
At press time, Bitcoin’s STH SOPR stood at 0.99—just below the profitability threshold. This near-neutral reading suggests a gradual adjustment driven by increased accumulation from short-term holders.
Historically, when STH moves into profitability, conviction tends to strengthen. Holders become less inclined to sell, as improving conditions often signal the potential for further price recovery.
Market positioned for a rebound
An analysis of the ratio between Long-Term Holder (LTH) SOPR and Short-Term Holder SOPR indicated that market conditions still favor further upside for Bitcoin.
The ratio sat around 1.3 at press time, placing it on the lower end of the historical range. When this ratio climbs to extreme highs, it often signals that Bitcoin has reached a local top. At present, the market remains well below those levels.
This suggests that the recent price pullback does not mark a cycle top and that buyers may still step in to accumulate at current levels.
STH SOPR moving decisively above the neutral level of 1 would further reinforce this outlook. As it rises, the LTH-to-STH SOPR ratio would also trend higher—a dynamic that has historically supported Bitcoin’s price strength.
Long-term holders still matter
While short-term holders play a critical role in stabilizing price action and supporting a potential rebound, long-term holders remain equally important.
For the current setup to hold, LTH must largely refrain from selling, as significant distribution from this group could weigh heavily on already limited demand.
The Binary Coin Days Destroyed (CDD) metric, which tracks whether long-term holders are spending or holding their coins, showed minimal selling activity. This suggests that LTH remain relatively inactive and confident.
As long as Binary CDD stays at a reading of 0, market conditions remain net positive, supporting the growing constructive sentiment across the Bitcoin market.
Final Thoughts
- Traditional investors exit the Bitcoin market with $1.33 billion in weekly outflows as short-term holders move closer to profitability.
- Market conditions suggest a potential setup for a rebound, with room for upside momentum.
