Bitcoin Short-Term Holder Capitulation Nears End As Realized Losses Drop Tenfold On Exchanges

Bitcoin is trading below the key $90,000 level after failing to break above crucial supply and losing its grip on important demand zones. The recent bullish speculation has quickly faded as selling pressure returns, sparking a wave of panic across the market. Investors, rattled by renewed volatility and macroeconomic instability, have begun offloading their positions, adding fuel to the ongoing correction.

Fears of a global recession and escalating trade war tensions continue to rattle financial markets, and Bitcoin is once again among the hardest-hit assets. Despite moments of strength in recent weeks, the leading cryptocurrency has struggled to hold higher ground, and its inability to reclaim $90K has intensified bearish sentiment.

However, on-chain data from CryptoQuant offers a nuanced perspective. The Bitcoin Short-Term Holder Profit Loss to Exchanges metric reveals that the average daily volume of losses realized by short-term holders (STH) on exchanges has decreased tenfold. Still, without a recovery above $90K, Bitcoin remains vulnerable. Bulls must step in soon to avoid further downside in an increasingly fragile market.

Bitcoin Holds $85K As Capitulation Trend Cools Off

Bitcoin is trading above the $85,000 level, maintaining a critical support zone, but momentum is fading fast. Despite recent attempts to rally, BTC has failed to gain traction and push higher, leaving bulls in a vulnerable position. Bears are now testing the strength of the $85K level, and a breakdown below this zone could confirm a deeper retrace and open the door to further losses.

Analysts remain divided on Bitcoin’s next move. Some warn that if BTC fails to reclaim $90,000 in the coming days, the current price action could mark the beginning of a broader downtrend. Others see potential for a bullish breakout if momentum returns and price clears the heavy supply zone above $90K. For now, the market remains caught in a tense standoff.

Amid the uncertainty, on-chain data offers some encouraging signals. Top analyst Axel Adler shared insights on X, pointing to a key shift in short-term holder behavior. According to Adler, the average daily volume of losses realized by short-term holders (STH) on exchanges has decreased tenfold. This suggests that investor willingness to lock in losses is fading, signaling that the capitulation phase for this cohort may be nearing its end.

The decline in realized losses often marks a turning point in market cycles, as panic selling dries up and stronger hands begin to take control. Still, Bitcoin’s ability to hold above $85K and reclaim $90K will determine whether a true recovery is in play or if more downside is ahead. As pressure builds, bulls and bears continue to battle for direction — and the next major move is likely just around the corner.

Bulls Fight To Regain Momentum

Bitcoin is currently trading at $85,000 after breaking below both the 4-hour 200 moving average (MA) and exponential moving average (EMA) — a bearish technical development that has triggered a wave of fear across the market. The loss of these key support levels suggests weakening momentum, and traders now expect a possible retest of the $83,000 zone, a level that previously acted as a short-term demand area.

The failure to hold above these moving averages has added pressure on bulls, who must now defend the $85K level to avoid further downside. If $85K is lost, it could open the door to a sharper correction and a breakdown in market structure.

However, the outlook isn’t entirely bearish. If Bitcoin can hold $85K and reclaim the $87K level in the coming sessions, momentum could quickly flip in favor of the bulls. A breakout above $87K would set the stage for a potential surge past the $90K resistance — a level that remains critical for confirming a bullish continuation.

Featured image from Dall-E, chart from TradingView 

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