Key Takeaways
Why is crypto struggling to recover from recent losses?
Market sentiment was weak. Bitcoin and altcoins posted small gains on Sunday and Monday, but the first hint of a retracement in the early hours of Sunday sparked a surge in short-term holders’ selling.
Are short-term holders selling or accumulating now?
They held BTC at a loss and collectively sent 56,000 BTC to exchanges at a loss, demonstrating panic-driven selling.
Between October 13 and the early hours of October 14Bitcoin [BTC] experienced a price drop of 5.05%.
In a span of 14 hours, the price dropped from $115,868 to $110,012. Over the past 24 hours, BTC has risen slightly at the time of writing, gaining 2.03%.
But even the Oct. 14 dip was enough to scare short-term holders into selling.
After the massive liquidations on October 10 and the speed of the fall, market participants prepared for another price drop.
Selling and bearish sentiment predominate in crypto land
In one post on X (formerly Twitter)crypto analyst Donkerfost noted that short-term holders were still in a state of panic. The 5% price drop that ended in the early hours of Tuesday was enough to spook short-term holders.
During the price drop, 56,000 Bitcoin was sent to exchanges at a loss. This was more than the amount sent to the exchanges during the actual liquidation episode. It revealed trigger-happy sellers fearing another price crash.
The analyst noted that short-term holders (STHs) moved their coins in a panicked manner for the third time in just a few days. In the 20 hours leading up to the report, Bitcoin traded mainly within the $112,000 to $113,000 range.
A price drop below $111.8k could alarm this cohort again, leading to more selling and greater volatility.
Crypto analyst Axel Adler Jr showed that short-term holders realized losses using the Bitcoin STH SOPR as its value was below 1. The metric also pointed to a weakness in demand.
A drop below 0.975 would mean the STH SOPR was in a “high stress zone,” which was previously reached in April 2025.
It’s possible that spooked sellers could fuel the cycle, driving prices lower and selling at greater losses until they are exhausted, leading to a bottom formation.