The Recent Bitcoin Selloff: A Closer Look
The Bitcoin market has witnessed significant activity over the past 24 hours, with short-term holders (STHs) selling approximately 55,000 Bitcoin, worth around $4.6 billion, at a loss. This selling spree comes as Bitcoin rebounds slightly after dipping below $80,000, marking its lowest point since early November. The cryptocurrency had previously seen gains following Donald Trump’s election victory, but recent price fluctuations have led to heightened selling activity among STHs. According to data from CryptoQuant, STHs—defined as addresses holding Bitcoin for fewer than 155 days—have been consistently moving large quantities of Bitcoin to exchanges. On Wednesday, as much as 80,000 BTC was transferred to exchanges, while yesterday’s figure reached 65,000 BTC. This trend suggests that short-term investors are under pressure to liquidate their holdings, potentially exacerbating market volatility.
Short-Term Holder Selling Pressure Intensifies
The recent surge in selling activity among STHs has been a dominant factor in the Bitcoin market. Over the past few days, these investors have moved substantial amounts of Bitcoin to exchanges, with daily figures ranging from 55,000 to 80,000 BTC. This contrasts with long-term holders (LTHs), who have been relatively less active. In fact, the total Bitcoin supply held by LTHs has increased by 47,000 since February 14, indicating that many long-term investors remain confident in Bitcoin’s prospects. However, Ruslan Lienkha, Chief of Markets at YouHodler, notes that some LTHs have been taking profits since mid-December, contributing to selling pressure and capping Bitcoin’s ability to surpass the $110,000 level.
Long-Term Holders: A Mixed Narrative
While LTHs have generally been less active in selling, their activity has not been entirely absent. According to Lienkha, some long-term investors have been partially selling their holdings, contributing to the overall market dynamics. This profit-taking behavior has played a role in setting the stage for the recent short-term holder selloff. Despite this, LTHs remain in a stronger position compared to their short-term counterparts. Data from CryptoQuant shows that the long-term holder MVRV (market value-to-realized value) ratio stands at 3.59, indicating that the majority of these investors are still in profit. In contrast, the short-term holder MVRV ratio has dropped to 0.89, signaling that many STHs are selling at a loss.
Expert Insights: Factors Driving the Selloff
Experts point to several factors driving the recent selloff, including the Bybit hack and tariff issues, which have forced short-term holders to liquidate their positions. Lienkha notes that around the $80,000 price level, a significant portion of short-term investors exited the market at a loss. Historically, such capitulation events often signal a temporary stabilization phase in the market. Markus Thielen, CEO of 10x Research, adds that many STHs who purchased Bitcoin at unfavorable levels in late January are now selling at a loss. Approximately 70% of recent Bitcoin sales are attributed to investors who bought after Trump’s inauguration on January 20, 2025. Conversely, those who acquired Bitcoin around the time of Trump’s election in November 2024 remain in profit and are not actively selling their holdings.
Market Implications: Volatility and Potential Stabilization
The adjusted long-term holder-to-short-term holder ratio, which classifies LTHs as those holding Bitcoin for between six months and three years, and STHs as those holding for under six months, has fallen to a three-and-a-half-year low. This ratio dropped from 1.5 at the end of October to 0.90 on February 9, indicating a volatile market environment with a preponderance of short-term holders. Even after the recent sell-off, the ratio remains at 0.92, while the STH MVRV ratio is at a six-month low. These metrics suggest that market conditions could deteriorate further before improving. However, the recent capitulation of short-term investors at the $80,000 level may signal a temporary stabilization phase, as historically such events have marked a turning point in market sentiment.
Conclusion: A Tale of Two Investor Groups
The recent Bitcoin market dynamics highlight a stark contrast between short-term and long-term investors. While STHs have been driving the selloff, selling at a loss to reduce their exposure, LTHs have remained relatively resilient, with many still holding onto their positions. The recent shakeout has underscored the vulnerability of short-term investors to market volatility and external pressures, such as the Bybit hack and regulatory concerns. As the market navigates this challenging landscape, the behavior of both STHs and LTHs will be crucial in determining Bitcoin’s next move. For now, the focus remains on whether the recent capitulation marks a temporary stabilization or the beginning of further downward pressure.
