Bitcoin (BTC) is experiencing one of its most severe waves of panic selling from recent buyers, with on-chain data showing that short-term holders (STHs) are offloading their stash at a significant loss.
This intense capitulation, according to analysts, is creating a potential setup for a major market reversal as weak hands exit and long-term investors accumulate.
Extreme Stress for Short-Term Holders
New on-chain readings shared by XWIN Research show Bitcoin’s Short-Term Holder Spent Output Profit Ratio (STH-SOPR) has dipped to about 0.97 and has stayed below 1.0 for several weeks now. It means those who bought BTC in the last few months are selling at a loss on average, forming what the firm calls a “capitulation band” that has previously appeared only near major turning points in Bitcoin cycles.
The Short-Term Holder MVRV ratio has also fallen well below 1.0, placing the same group of investors underwater and signaling one of the weakest profitability phases in the dataset. According to XWIN, more than 65,000 BTC have been sent to exchanges at a loss, showing that fear is not just theoretical but visible in real selling.
At the same time, pseudonymous analyst Darkfost noted that while short-term holders are dominating day-to-day flows, long-term holders (LTHs) are now adding real sell pressure. They shared Spent Transaction Output (STXO) data showing STH flows remain high but relatively balanced, while LTH STXO has spiked, pointing out that such patterns are usually seen near market tops or during major stress events.
Capitulation Amid Retail Fear
Looking at the markets, BTC is trading around $91,000, down about 13% over the past week and nearly 18% in the last 30 days, while essentially flat across 12 months. The premier cryptocurrency has moved between roughly $90,000 and $94,000 in the last 24 hours and remains about 27% below its October all-time high north of $126,000.
Additionally, data shows that small BTC wallets have dumped around 0.36% of their holdings in just five days, with similar selling in ETH and XRP, reflecting deep retail anxiety. The Fear and Greed Index also recently dropped to a nine-month low, mirroring levels last seen during major market panics.
However, some longer-term signals look more constructive. For example, realized losses for Bitcoin recently reached about -16%, a zone that in previous cycles came right before recoveries. Analysts are also reporting record 30-day demand from long-term “permanent” holders and fresh accumulation from buyers such as El Salvador, which just added more than 1,000 BTC during the dip.