Bitcoin On the Verge of Capitulation as Immediate Investors Suffer Heavy Losses

Bitcoin Faces Pressure as Short-Term Holders Struggle, Long-Term Investors Continue Accumulating

Bitcoin’s on-chain data is showing clear signs of distress among short-term holders, with the short-term holder (STH) MVRV ratio falling to 0.82. This level is traditionally viewed as an indicator of market stress and potential capitulation, according to recent data from Glassnode.

The STH MVRV ratio compares Bitcoin’s current market value with the average price at which short-term holders purchased their coins. When the ratio drops below 1.0, it signifies that most short-term holders are holding unrealized losses. With the current value at 0.82, this indicates that short-term holders are, on average, down around 18% on their Bitcoin holdings, signaling widespread pain in the market.

This drop is reminiscent of past MVRV cycle lows, such as 0.84 in August 2024 and 0.77 in November 2022, both of which preceded market bottoms and trend reversals.

According to Glassnode, such low MVRV levels often signal a turning point, where the weak hands—those holding for a short time—are forced to sell, while long-term investors step in to accumulate at discounted prices. Since February, long-term holders (those holding Bitcoin for 155 days or more) have increased their holdings by roughly 500,000 BTC.

At the same time, short-term holders have sold over 300,000 BTC, driven by a mix of profit-taking and capitulation. This shift suggests that long-term holders are accumulating Bitcoin at a faster pace than short-term holders are offloading, reflecting a broader trend toward stability among more seasoned investors.