Short-Term Bitcoin Holders Show Signs Of Stress – A Buy Opportunity For Long-Term Investors?

Bitcoin (BTC) is now trading below the $85,000 mark, raising concerns that further downside could follow if bulls fail to reclaim this key level. The market remains under intense selling pressure, with uncertainty weighing heavily on investor sentiment.

Since the U.S. elections in November 2024, macroeconomic uncertainty and increased volatility have driven both the crypto and stock markets lower. The lack of stability and growing fears of a prolonged risk-off environment have left Bitcoin struggling to regain momentum, with bulls unable to push BTC back above crucial resistance levels.

CryptoQuant insights reveal that the current stress level among short-term holders (STH) is within the normal range for this cycle. The STH Spent Output Profit Ratio (SOPR) is currently at 0.96, indicating that many short-term holders are selling at a loss as BTC remains in a post-all-time-high (ATH) distribution phase.

For BTC to avoid further declines, bulls must reclaim the $85K level quickly and regain market confidence. If they fail, the market could see increased selling pressure and lower price targets in the near term.

Bitcoin Faces Mounting Fear

As Bitcoin and global markets continue to struggle for a recovery, speculation dominates investor sentiment. Fears of a global trade war and volatile macroeconomic conditions have sent both the crypto and U.S. stock markets to their lowest levels in months, leaving traders uncertain about what’s next.

Bitcoin is now trading at its lowest levels since November 10, 2024, and bulls appear to have a long road ahead to regain control. BTC has been in a consistent downtrend since late January, and as bearish sentiment intensifies, investors continue setting lower targets, with many now questioning whether the Bitcoin bull cycle is over.

Despite the widespread uncertainty, top analyst Axel Adler shared key insights suggesting that Bitcoin’s current stress levels remain within a normal range for this cycle. According to CryptoQuant data, the Short-Term Holder Spent Output Profit Ratio (STH SOPR) is at 0.96, indicating that many short-term holders are selling at a loss. Bitcoin is currently in a post-all-time-high (ATH) distribution phase, a period that typically results in high volatility and indecision.

Adler points out that fear among short-term holders can often be a key indicator of extreme seller exhaustion, which in the past has created buying opportunities for long-term investors. While BTC remains under pressure, history suggests that periods of intense fear and capitulation often set the stage for strong recoveries once selling pressure subsides.

For now, Bitcoin’s short-term trajectory remains uncertain, and bulls must reclaim key levels to restore market confidence. The next few weeks will be crucial, as traders watch for signs of stabilization or deeper corrections in the crypto market.

Bulls Struggles To Reclaim Key Levels Above $85K

Bitcoin (BTC) is currently trading at $82,700, following several days of selling pressure that has kept it below the crucial $85K mark. The market remains under bearish control, and BTC has yet to show signs of a recovery, with bulls struggling to establish strong support.

For BTC to regain momentum, bulls must reclaim the $83K–$85K range, as this level aligns with the daily 200-moving average (MA) and exponential moving average (EMA). A break and hold above this zone would indicate renewed buying interest, potentially setting the stage for a trend reversal.

However, if BTC fails to reclaim the 200-day MA and EMA in the coming days, selling pressure could intensify, leading to a massive drop below $80K. A break below this psychological level could trigger further liquidations, pushing BTC toward lower demand zones and extending its bearish trajectory.

With market sentiment still weak, the next few trading sessions will be crucial in determining whether Bitcoin can recover or if another wave of sell-offs will drive it lower. Bulls must act quickly, or BTC may face further downside risks in the short term.

Featured image from Dall-E, chart from TradingView