Bitcoin's Wild Ride: STH Losses and SOPR Signals – What's Next?

Bitcoin's recent volatility has short-term holders sweating, but SOPR signals hint at potential stabilization. Is capitulation here, or is there more downside to come?

Bitcoin's Wild Ride: STH Losses and SOPR Signals – What's Next?

Bitcoin's been on a rollercoaster, with short-term holders feeling the heat. Are we seeing capitulation, or is there more downside ahead? Let's dive into the on-chain signals.

Fear Grips the Market: STH Losses Surge

Bitcoin took a tumble from the $110,000 range, briefly dipping below $100,000. This sharp decline reflects mounting fear, with short-term holders (STHs) feeling the pain. According to on-chain analyst Axel Adler, loss-making transactions among STHs are surging. The 7-day Short-Term Holder Spent Output Profit Ratio (STH-SOPR) is below 1, indicating that newer holders are selling at a loss. This suggests panic-driven selling, as reactive market participants offload positions under stress.

SOPR Signals: Capitulation Not Yet Complete?

While STH losses are rising, Adler notes that current on-chain stress hasn't reached full capitulation levels. The STH-SOPR Z-score, while negative, isn't as low as during previous major corrections. This suggests the market might be in the middle phase of its correction, rather than at the end. We're seeing pain and fear, but not a complete exhaustion of sellers. This leaves room for further downside or a potential stabilization if buyers step in.

Price Action: Testing Key Support Levels

Bitcoin is attempting to stabilize, but the recovery lacks strength. The prior key demand zone around $105,000–$107,000 has flipped into resistance. Failure to build support above $100,000 could expose the next liquidity pocket toward $96,000–$98,000. A sustained bounce requires buyers to defend current levels as the market tests conviction under stress.

Galaxy Digital's Take: Bullish Long-Term, Cautious Short-Term

Even with the recent volatility, some institutions remain bullish. Galaxy Digital, while lowering its 2025 price forecast to $120,000, maintains a long-term bullish stance. They cite institutional inflows and ETF growth as drivers of the next expansion phase. Galaxy believes that as long as Bitcoin holds above $100,000, the broader bull market structure remains intact. Other institutions, like Metaplanet, are doubling down, expanding their Bitcoin holdings.

The Bottom Line

Bitcoin's facing some headwinds, with STH losses and SOPR signals painting a mixed picture. While short-term pain is evident, the long-term outlook remains optimistic for many. Whether we see further downside or a swift recovery depends on buyer conviction and the ability to reclaim key support levels.

So, buckle up, HODLers! It's gonna be a bumpy ride. But hey, isn't that what makes Bitcoin so exciting?