On-chain data shows the Bitcoin short-term holders have been transferring large amounts to exchanges at a loss following BTC’s bearish action.
The STHs refer to the BTC holders who purchased their coins within the past 155 days. Statistically, the longer an investor holds their coins, the less likely they become to sell them in the future. As such, the STHs with their relatively low amount of holding time are considered to represent the weak hands of the market.
Like usual, this cohort has also panicked in the face of the latest price volatility. Below is the chart shared by Maartunn that shows the trend in the loss transactions made by the cohort’s members to wallets connected with centralized exchanges.
From the graph, it’s apparent that the Bitcoin STHs deposited nearly 32,000 BTC at a loss to exchanges during the crash from earlier in the week. Generally, holders transfer their coins to exchanges when they want to make use of one of the services that they provide, which can include selling.
The latest decline in BTC’s price to levels under $109,000 has been met with a similar reaction, with the 24-hour value of the metric hitting the 29,700 tokens mark.
In total, the STHs have participated in capitulation of more than 60,000 BTC, worth a whopping $6.5 billion, across these two loss-taking waves. “That’s a clear sign of heavy stress across the market,” notes the analyst.
The Bitcoin Bull-Bear Market Cycle Indicator uses the data of several popular on-chain metrics to determine what phase of the cycle the asset is currently in. According to the indicator, BTC is in a bearish phase at the moment.
The 365-day moving average (MA) of the metric has also been on the way down for a while now, which also doesn’t tend to be a positive signal. “Historically, most BTC gains happen when this metric is rising, not falling,” explains the analyst.
Bitcoin has come down to the $108,900 level following a decline of more than 5.5%.
