Since hitting $126,000 three months ago, Bitcoin has faced continued selling pressure, sliding to a cycle low of nearly $80,000. This pullback weighed heavily on short-term holders as unrealized losses increased.
Checkonchain data showed that short-term unrealized losses rose to a record $110 billion in November.
Source: Checkonchain
However, circumstances have changed in the past two weeks. Bitcoin recovered sharply and rose to $97,000. This move reduced the short-term holders’ unrealized losses to roughly $65 billion, lifting the cohort out of extreme stress.
Bitcoin STHs leave extreme stress
According to CryptoQuant analyst DarkfostShort-term Bitcoin holders finally left the extreme discomfort zone. Earlier in the cycle, BTC entered a capitulation phase, with STHs posting average losses of more than 10%.
Source: CryptoQuant
With Bitcoin trading just below $100,000, short-term holders suffered losses of almost 6.4% on average. Although the cohort remained submerged, the pressure decreased significantly.
That shift reduced the chance of panic-driven selling among this group.
The selling risk for short-term holders even fell sharply. The indicator dropped to 0.000875, approaching an all-time low, per Checkonchain.
Source: Checkonchain
Such depressing figures suggested that most STH sales had already occurred. The remaining salespeople seemed exhausted.
Still, this did not guarantee an immediate benefit. It did imply that increasing demand could move the price more easily.
Why STHs remained sidelined
Despite Bitcoin’s recovery, short-term holders did not rush to sell into strength. The cohort largely lacked incentive.
Weaker hands already went out during previous drawdowns, reducing the persistent loss realization.
Source: Checkonchain
Checkonchain data showed the market was turning away from foreclosures.
In addition, the Short-Term Holder SOPR improved. The measure rose from 0.94 to 1.0 at the time of writing, indicating that recent losses have been absorbed.
That stabilization suggested that equilibrium was returning, increasing the likelihood of continued recovery.
With available profits limited and losses already incurred, STHs seemed more likely to hold.
A glimpse of hope for BTC?
Bitcoin previously attempted a breakout but faced a rejection near $97,939, causing a modest pullback. The price then consolidated around $95,000, with $94,000 acting as short-term support.
Source: TradingView
At the time of writing, Bitcoin [BTC] traded at $95,147. It fell 0.5% daily but rose 4.93% on the week.
Despite the setback, momentum improved. The Chande Momentum Oscillator climbed from 16 to 52, signaling strengthening upward momentum.
Bitcoin also rose above its 20-day and 50-day EMAs. At the time of writing, the price was testing the 100-day EMA around $95,942.
A sustained reversal above that level could confirm bullish control and open a move towards the 200-day EMA at $99,423. In contrast, a failure at the 100-day EMA could send BTC back to the $92,388 support zone.
Final thoughts
- Short-term holders of Bitcoin are outside the extreme discomfort zone, as average losses for the cohort fall to 6.4%.
- Bitcoin [BTC] shows upside momentum as STHs ease selling pressure while targeting $99,000.