Briefing
The Bitcoin market is showing clear signs of demand exhaustion, as the price has fallen below the Short-Term Holder Cost Basis, a critical level that historically signals structural weakness. This suggests the current correction is the start of a necessary, prolonged consolidation phase, requiring the market to absorb supply rather than quickly bouncing. This structural fatigue is driven by consistent profit-taking from veteran investors. The thesis is proven by Long-Term Holders distributing over 22,000 BTC per day, a sustained sell-off that new demand is failing to counteract.
Context
The core market uncertainty is whether the recent price drop represents a quick dip before a rally continuation or the start of a deeper, multi-month consolidation. The average investor is wondering if the current price is a structural bottom or if significant downside risk remains from veteran profit-takers. This data provides clarity on the true health of the demand side.
Analysis
The Short-Term Holder Cost Basis (STH-CB) is the average price at which all coins moved on-chain in the last 155 days were acquired. It acts as the line between profit and loss for the most recent buyers. When the price trades below this level, the average recent buyer is underwater, often triggering capitulation and signaling structural market weakness.
The observed pattern is the price failing to hold this level for the third time this cycle, coinciding with Long-Term Holders (veteran investors) consistently selling over 22,000 BTC daily. This combination proves that new demand is too weak to absorb the veteran supply, leading directly to the conclusion of demand exhaustion and the need for a long consolidation.
Parameters
- Key Metric → Bitcoin Price Below STH Cost Basis.
- STH Cost Basis → ~$113.1k. (The average price of coins acquired in the last 155 days.)
- LTH Distribution Rate → >22,000 BTC/day. (The 30-day average of coins spent by veteran investors.)
- Critical Support Quantile → ~$108.6k. (The price level where 15% of the total supply is held at a loss.)
Outlook
This insight suggests the near-term future involves an extended period of sideways price action and volatility as the market attempts to find a true structural floor. The market must endure this phase until the consistent Long-Term Holder distribution slows or until a massive wave of new spot demand emerges. A confirming signal to watch for is a sustained drop toward the next critical support at the 0.75 quantile, near $97.5k, which would indicate a deeper correction is underway.
Verdict
The market is structurally weak and requires a prolonged consolidation phase to absorb veteran profit-taking.
