Bitcoin (BTC) has entered a period of relative calm this week, as geopolitical tensions between Israel and Iran—combined with anticipation ahead of the upcoming Federal Reserve FOMC meeting—have prompted investors and traders to adopt a cautious, wait-and-see approach. Despite the market's subdued activity, on-chain data from CryptoQuant reveals a telling trend: short-term holders (STHs) have moved over 15,000 BTC at a loss in the past seven days.
This behavior underscores a recurring psychological pattern in volatile markets—short-term investors, often referred to as "weak hands," tend to panic-sell during price dips, locking in losses instead of holding through temporary corrections. As BTC dipped from $106,500 to $103,500 between Monday and Wednesday, Glassnode data shows a sharp increase in unprofitable BTC transfers to exchanges—from just 959 BTC on Monday to a staggering 16,700 BTC by midweek.
The Shift From Weak to Strong Holders
The selling pressure from short-term holders is not merely noise—it reflects a structural transfer of supply from weaker to stronger hands. When these "weak holders" exit their positions, their coins are often absorbed by long-term holders (LTHs), who view price dips as accumulation opportunities rather than reasons to flee.
This dynamic plays a crucial role in stabilizing the market. As supply tightens due to reduced selling from short-term investors, the foundation for a more resilient price floor is formed. Over time, this shift contributes to increased market maturity and reduces the likelihood of prolonged bearish spirals.
According to on-chain metrics, the total supply held by short-term holders has been steadily declining, especially following significant price corrections. This reduction in circulating supply from weak hands suggests that selling exhaustion may be nearing—a classic precursor to bottom formation.
Key Support Zone: $94K–$97K
Analysis points to a critical support range between $94,000 and $97,000, which aligns with the average cost basis of many short-term holders. Should prices dip into this zone, it could trigger final capitulation events before stronger demand re-emerges.
This range is also significant because it encompasses key technical levels such as fair value gaps (FVGs) and daily order blocks—areas where institutional orders are likely clustered. A retest of these levels could clear remaining leverage positions below $100K and set the stage for a sustainable rebound.
Market in the “Blind Spot”: Demand Awaits
Swissblock, a blockchain analytics platform, describes the current state of Bitcoin as navigating a “blind spot”—a phase where price movements lack clear directional momentum due to muted buyer demand. Since June, spot trading volume differentials have remained negative, indicating that while prices have rebounded slightly, they’ve done so without strong buying conviction.
This imbalance suggests that although downward pressure is easing, any meaningful breakout above current levels will depend heavily on renewed demand. Without significant inflows from institutional or retail buyers, Bitcoin may face an extended consolidation or even a shallow pullback before resuming its upward trajectory.
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Accumulation vs. Distribution: Reading the Signals
One of the most powerful tools for gauging market health is tracking net position changes between short-term and long-term holders. The STH-LTH net flow chart from CryptoQuant illustrates that over the past month, short-term holders have been consistently offloading BTC—much of which has been quietly accumulated by long-term investors.
This accumulation phase is typical during periods of uncertainty. While weaker participants exit, more strategic players use volatility as an opportunity to build positions at marginally lower prices. This silent accumulation often precedes major price moves, as supply becomes increasingly concentrated in fewer, more resilient hands.
Moreover, the fact that long-term holders are absorbing supply without triggering a price collapse indicates underlying strength. It suggests confidence in Bitcoin’s long-term value proposition—even amid short-term turbulence.
What’s Next for Bitcoin?
With technical support around $94K–$97K and structural accumulation underway, the risk of a deep drop below $90K appears limited—unless external macro shocks intervene. Instead, markets may be setting up for a period of consolidation followed by renewed upward momentum once demand returns.
Key factors to watch include:
- Spot ETF inflows: Sustained buying through U.S.-listed Bitcoin ETFs would signal strong institutional interest.
- On-chain activity: Continued accumulation by large wallets and long-term holders supports bullish bias.
- Macroeconomic developments: Fed policy expectations, inflation data, and dollar strength will influence investor appetite for risk assets like BTC.
While Bitcoin remains below its recent highs, the current environment reflects maturation—not weakness. The transition from speculative frenzy to strategic holding is a hallmark of an asset gaining legitimacy in global financial systems.
Frequently Asked Questions (FAQ)
Q: Who are "weak holders" in Bitcoin?
A: Weak holders typically refer to short-term investors who bought near price peaks and are prone to panic-selling during downturns. They often lack conviction and exit positions at a loss when volatility increases.
Q: Why does selling by weak hands matter?
A: When weak holders sell, their coins are usually bought by long-term or institutional investors. This transfer reduces circulating supply and strengthens market resilience, often paving the way for future price growth.
Q: Is Bitcoin likely to fall below $90,000?
A: Based on current on-chain data and cost basis analysis, a drop below $90K is unlikely unless triggered by unexpected macroeconomic shocks. The $94K–$97K range is seen as a strong support zone.
Q: What defines the "blind spot" in crypto markets?
A: A blind spot refers to a market phase with low trading volume and unclear direction—where price moves lack confirmation from strong buyer or seller conviction. It often precedes breakout or breakdown scenarios.
Q: How do long-term holders influence Bitcoin’s price?
A: Long-term holders act as a stabilizing force by reducing sell pressure. Their consistent accumulation during dips absorbs excess supply and creates tighter markets, supporting price recovery.
Q: Can Bitcoin still reach new all-time highs in 2025?
A: Yes—many analysts remain bullish for 2025 due to anticipated demand from spot ETFs, halving-driven scarcity, and growing adoption. Short-term corrections do not negate long-term upside potential.
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