The Bitcoin market is navigating a turbulent stretch: $1.1 billion in realized losses recorded in a single session, with selling pressure putting investors’ psychological resilience to the test.
Yet behind that stark figure, on-chain data tells a more nuanced story. Not all holders are reacting to the volatility in the same way.
One group in particular is staying remarkably calm — and that is precisely the signal analysts should be paying close attention to.
$1.1 Billion in Losses: Who Is Really Selling?
On-chain data from CryptoQuant and CoinGlass points to a targeted capitulation: it is primarily Short-Term Holders (STH) who are realizing losses. These investors, who entered the market during recent price peaks, now find themselves below their average acquisition cost and are choosing to cut their positions.
This behavior is a classic feature of prolonged correction phases. When the Bitcoin spot price drops below the average cost basis of STHs, the psychological pressure becomes unbearable for a portion of them. The result: cascading sell-offs that amplify the short-term decline and fuel volatility across derivatives markets.
The $1.1 billion in realized losses is significant, but it fits within a pattern already observed during the corrections of 2022 and 2024. This is not a signal of broad-based capitulation — it is a selective flush of weak hands.
Long-Term Holders: The Bullish Signal the Market Is Ignoring
While STHs are liquidating, Long-Term Holders (LTH) — defined as wallets holding BTC for more than 155 days — are maintaining their positions. On-chain metrics show that the LTH spending rate remains low, and is even declining, despite the bearish price pressure.
Historically, this behavior is one of the most reliable indicators of Bitcoin‘s structural market health. LTHs have navigated multiple full cycles: they carry a far higher drawdown tolerance than new entrants and have no urgency to sell at levels they consider undervalued relative to their investment horizon.
The MVRV Z-Score and the Spent Output Profit Ratio (SOPR) for LTHs confirm this reading: long-term holders are not distributing at scale. They are accumulating, or simply waiting — which, in on-chain language, is often the precursor to a resumption of bullish price action.
What This Divergence Reveals About Market Structure
The divergence between STHs and LTHs is far from trivial. It signals that the market is in a phase of redistribution from weak hands to strong hands — a well-documented mechanism across Bitcoin cycles. Recent buyers, often driven by FOMO during rallies, are handing off their positions to more seasoned investors who view the correction as an entry or accumulation opportunity.
This dynamic does not guarantee an immediate rebound. Key support levels on the chart — particularly the liquidity zones identified between $75,000 and $78,000 according to CoinGlass data — remain under close watch. Holding above these thresholds would be a positive technical signal for the continuation of the medium-term bullish structure.
On the other hand, if STH selling pressure intensifies without sufficient absorption by LTHs and institutional buyers, a test of deeper support levels remains a real possibility. The market is at a crossroads: the resilience of long-term holders will be the defining factor for Bitcoin’s next price action move.
