Bitcoin Short-Term Holders Panic Capitulate $2.6 Billion In BTC Crash

On-chain data shows that Bitcoin short-term holders have panic sold $2.6 billion worth of coins in the crash following the new all-time high.

As analyst James V. Straten explained in a new post on X, Bitcoin short-term holders have shown signs of capitulation during the latest drop in the cryptocurrency’s price.

The “short-term holders” (STHs) refer to the BTC investors who bought their coins within the past 155 days. The STHs make up one of the two main divisions of the market, the other one being the “long-term holders” (LTHs).

Statistically, the longer an investor holds onto their coins, the less likely they are to sell at any point. This means that the STHs, who are relatively new hands, generally sell quickly whenever an asset crash or rally occurs. The LTHs, on the other hand, usually show resilience, only selling at specific points.

One way to track whether either of these groups is selling is through the transfer volume they are sending to exchanges. First, here is a chart that shows the trend in the Bitcoin exchange inflow volume precisely for the STHs in loss:

As displayed in the above graph, the Bitcoin STHs have transferred around $2.6 billion worth of coins in loss to exchanges in the past day, implying that some members of this cohort have capitulated.

This spike is huge, but it’s less than the loss-taking event that took place back during the price drawdown that followed the BTC spot exchange-traded fund (ETF) approval.

These loss sellers would be those who FOMO’d into the rally that took BTC to a new all-time high beyond the $69,000 level, but their conviction wasn’t strong enough that they were able to hold past the sharp crash that BTC observed shortly after.

The STHs aren’t the only ones who have exited the market in this latest price volatility; it would appear that the LTHs have also done some selling. The difference, however, is that these HODLers have made profits.

The chart below shows how the exchange transfer volume for the LTHs in profit has looked like recently.

The graph shows that the Bitcoin LTHs have participated in their largest profit-taking event since July 2021, transferring tokens worth $1.5 billion to exchanges.

Thus, it would appear that this recent volatility has shaken up the conviction of even some of the diamond hands, although these HODLers have at least still been rewarded with profits.

At the time of writing, Bitcoin is trading around the $65,800 mark, up 8% in the past week.