Bitcoin Market Shift: Weak Hands Not Capitulating Despite Crash

On-chain
data
suggests
the
Bitcoin
short-term
holders
haven’t
been
capitulating
during
the
crash,
a
sign
that
a
shift
has
occurred
in
the
market.

Bitcoin
Short-Term
Holders
Haven’t
Been
Doing
Much
Loss-Selling
Recently

As
pointed
out
by
analyst
James
Van
Straten
in
a

post
on
X,
the
BTC
short-term
holders
haven’t
been
sending
much
BTC
at
a
loss
recently,
despite
the
plunge
the
asset’s
price
has
suffered.

The
“short-term
holders”
(STHs)
refer
to
the
Bitcoin
investors
who
bought
their
coins
within
the
past
155
days.
These
investors
make
up
one
of
the
two
main
divisions
of
the
BTC
market,
with
the
other
cohort
being
known
as
the
“long-term
holders”
(LTHs).

Statistically,
the
longer
an
investor
holds
their
coins,
the
less
likely
they
are
to
sell
at
any
point.
As
such,
the
LTHs
are
considered
the
resolute
side
of
the
market,
while
the
STHs
are
considered
the
weak
hands.

Generally,
the
STHs
easily
sell
whenever
a
change
in
the
market
happens,
like
a
crash
or
rally.
As
such,
these
investors
could
be
expected
to
have
participated
in
some
selling
during
the
latest
plummet
in
the
coin
as
well.

One
way
to
track
whether
these
investors
are
selling
or
not
is
to
track
their
exchange
deposits.
Holders
don’t
always
deposit
to
these
platforms
for
selling,
as
they
offer
other
services
as
well,
but
inflows
during
a
rally/crash
are
more
often
than
not
an
indication
of
a
selloff.

In
the
current
discussion,
the
entire
exchange
transfer
volume
for
this
cohort
isn’t
of
interest,
but
only
the
part
of
it
that’s
being
deposited
at
a
loss.
As
Straten
has
highlighted
in
the
chart
below,
a
curious
pattern
has
emerged
in
this
loss
exchange
inflow
volume
for
the
STHs.

The value of the metric appears to have been on the decline in recent weeks | Source: @jvs_btc on X

As
displayed
in
the
above
graph,
the
Bitcoin
transfer
volume
from
the
STHs
in
loss
to
exchanges
registered
a
huge
spike
back
in
January,
as
the
market
downturn
following
the
approval
of
the
spot
exchange-traded
funds
(ETFs)
occurred.

In
the
price
decline
that
followed
the
top
in
May,
the
metric
also
registered
a
large
spike,
although
notably
smaller
in
scale
than
the
January
one.
It
would
appear
that
during
both
of
these
drawdowns,
the
STHs
had
shown
a
significant
capitulation
reaction.

During
the
latest
crash,
however,
the
trend
doesn’t
appear
to
have
been
the
same.
“What
is
really
interesting
is
that
in
these
past
two
days,
Bitcoin
dropped
12%,
but
STHs
sent
very
little
Bitcoin
to
exchanges
at
a
loss,”
notes
the
analyst.

This
would
suggest
that
these
weak
hands
have
gained
some
strength
recently.
“Lettuce
hands
are
becoming
slightly
less
erratic,
signs
of
a
maturing
market,”
says
Straten.

BTC
Price

Bitcoin
has
shown
some
recovery
from
the
crash
during
the
past
24
hours
as
its
price
has
now
returned
back
to
the
$60,700
level.

Looks like the price of the asset has shot up over the past day | Source: BTCUSD on TradingView

Featured
image
from
Michael
Förtsch
on
Unsplash.com,
Glassnode.com,
chart
from
TradingView.com