Short-Term Bitcoin Investors Are Capitulating at a Historic, Unprecedented Loss Level → Insights

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Briefing

Short-Term Bitcoin Holders are logging the largest realized losses in history, a clear sign that new investors are fully capitulating. This extreme level of panic selling suggests the market is nearing a structural bottom, as the weakest speculative hands are flushed out of the system. The thesis is proven by over $900 million in losses being realized daily.

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Context

As the Bitcoin price corrects, the common question is whether the decline is a healthy reset or the start of a prolonged bear market. Investors are wondering if the recent buyers who drove the last rally still have conviction or if they are giving up. This data helps to answer the true depth of the correction by tracking the behavior of these newest market participants.

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Analysis

Realized Loss measures the total dollar value of coins moved on-chain where the price at the time of the move was lower than the price when the coin was last moved. When this metric spikes, it means investors are selling at a loss. The Short-Term Holder (STH) group, defined as those holding coins for less than 155 days, is the most sensitive to price drops. The observed pattern is a massive, unprecedented spike in STH realized losses, indicating these newer, less-convicted investors are selling in a panic.

This volume of loss realization is a classic, albeit painful, signal of capitulation, which often precedes a major market reversal. The current loss volume surpasses all previous major market shock events.

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Parameters

Daily Realized Loss Volume → Over $900 Million Daily. This is the dollar value of losses realized by sellers in a single day.
Investor Group → Short-Term Holders. This group includes all wallets holding Bitcoin for less than 155 days.
Historical Comparison → Exceeds all prior cycles. The current loss realization volume is higher than the capitulation seen during the FTX collapse, the China mining ban, and the COVID crash.

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Outlook

This extreme capitulation suggests the price is near a structural bottom, as the market is fully cleansing its weakest speculative capital. The near-term future is likely a period of consolidation, but the risk of further downside from panic selling is significantly reduced. A confirming signal to watch is a sharp decline in the Short-Term Holder Supply in Profit, which would indicate that the remaining STHs have also been pushed to their cost basis, signaling the final point of exhaustion.

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Verdict

The market has entered a historic capitulation phase, signaling that the structural price floor is near.

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