Briefing
The market has entered a mild bear phase, not a deep capitulation, defined by persistent distribution from long-term holders (LTHs) selling into price weakness. This behavior confirms a structural slowdown where demand momentum is fading, placing the market at a pivotal juncture reminiscent of mid-cycle corrections. The most critical data point proving this thesis is the LTH Supply decline of approximately 300,000 BTC since July, which shows patient investors are continuing to offload their coins even as the price trends lower.
Context
After the recent price breakdown below the $100,000 psychological level, the central market uncertainty is whether this is a healthy, expected mid-cycle correction or the beginning of a deeper, more painful bear market capitulation. Investors are wondering if the recent drop is just a pause before the next rally or a fundamental sign that the multi-year bull trend is truly over.
Analysis
The key indicator is the Long-Term Holder (LTH) Supply change, which tracks the number of coins held for over 155 days. When this metric declines, it means patient, experienced investors are spending their coins. The current pattern shows a sustained decline in LTH supply, which is not unusual during a bull market. However, the critical insight is that this selling is now occurring into weakness ∞ meaning LTHs are distributing their coins after the price has dropped, not into strength during a rally.
This is a clear signal of fading discretionary demand, as new buyers are not absorbing the supply at higher prices. Furthermore, the Relative Unrealized Loss metric, which measures the total loss intensity, remains low at 3.1%. This suggests the market is under moderate stress and experiencing an orderly revaluation, which is consistent with a mid-cycle slowdown, not the panic selling seen in deep bear markets where this metric typically exceeds 5%.
Parameters
- LTH Supply Decline ∞ ~300,000 BTC. This is the amount of Bitcoin that long-term investors have sold since July 2025.
- Supply in Profit ∞ 71%. This percentage of the total circulating supply still holds an unrealized profit.
- Relative Unrealized Loss ∞ 3.1%. This measures the total unrealized losses relative to the market capitalization, indicating a mild stress level.
- Price Consolidation Level ∞ $100,000. The psychological threshold that Bitcoin recently broke below.
Outlook
The persistent long-term holder distribution and contained loss intensity suggest the market will likely remain in a consolidation or “mild bear” phase for the near term. A sustained recovery requires renewed demand to absorb the ongoing supply from LTHs. The single most important confirming signal to watch for next is a clear, sustained move back above the Short-Term Holder Cost Basis, which acts as a key technical and on-chain support level. Reclaiming this level would indicate that fresh demand is finally strong enough to reverse the current trend of selling into weakness.
