- Bitcoin Plunges 6.88% in 24 hours, crashing to a 5-month low of $74K—breaking critical support at $80K.
- Short-Term Holders (STHs) in Full Capitulation—STH-SOPR drops to 0.98, signaling mass loss realization and panic exits.
- Exchange Netflows Turn Positive for three straight days, confirming more sellers than buyers in the market.
- Whales Join the Sell-Off—Large holders’ exchange inflows spike to 0.53%, indicating eroding confidence among big players.
- Supply Shock Looms—BTC’s stock-to-flow ratio surges from 35.2K to 43.8K, signaling rising sell pressure with weak demand.
- Next Critical Levels: A drop to $71,858 seems likely unless Bitcoin reclaims $80K to stabilize sentiment.
Short-Term Holders Hit the Panic Button
Bitcoin’s brutal sell-off has left short-term holders (STHs) scrambling for exits. The STH-SOPR (Spent Output Profit Ratio), a key metric tracking whether STHs are selling at a profit or loss, has collapsed to 0.98—a clear sign of capitulation. Historically, when this metric dips below 1.0, it signals that recent buyers are dumping at a loss, often marking local bottoms—or the start of deeper declines.
This isn’t the first time STHs have panicked. Earlier in 2024, a similar STH-SOPR breakdown led to a violent sell-off, and history may be repeating itself. With Bitcoin now below $80K, a psychological support level, weak hands are fleeing en masse. If this selling pressure continues, long-term holders (LTHs) may soon face a tough choice: hold through the storm or join the exodus.
Whales Abandon Ship—A Bearish Omen?
Retail traders aren’t the only ones running for cover. Whales—Bitcoin’s largest holders—are also cashing out. Data reveals a 0.53% spike in whale exchange inflows, meaning big players are dumping BTC onto the market. When whales sell, it’s rarely a good sign—it suggests institutional doubt and can trigger cascading liquidations as smaller traders follow suit.
Making matters worse, exchange netflows have been positive for three consecutive days, meaning more BTC is flowing into exchanges than out. This is a classic distribution signal, where sellers overwhelm buyers. If this trend persists, Bitcoin could face another leg down, especially with supply swelling (stock-to-flow ratio up 24% in a day). The market is now a battlefield between fear and forced selling.
Supply Shock vs. Demand Drought: What’s Next?
Bitcoin’s rising supply (43.8K BTC now available for sale) is colliding with shrinking demand, creating a perfect storm for further downside. The last time supply surged this fast, BTC tumbled 20%+ before stabilizing. If history rhymes, we could see $71,858 tested soon.
Yet, not all hope is lost. Extreme fear often precedes reversals, and Bitcoin has a habit of bouncing violently after STHs capitulate. For a true recovery, however, BTC must reclaim $80K—a level that now acts as resistance. Until then, the market remains at the mercy of panic sellers and opportunistic shorts.
Conclusion: Brace for More Volatility
Bitcoin’s current downturn is a textbook fear cycle:
- STHs are dumping at losses (STH-SOPR < 1).
- Whales are offloading (exchange inflows rising).
- Supply is ballooning while demand falters.
Two Scenarios Ahead:
- Further Drop to $71,858 if selling pressure continues.
- Dead Cat Bounce if BTC stabilizes and reclaims $80K.
For now, caution is key. The market is in capitulation mode, and until buyers step in aggressively, the path of least resistance remains down.
Source:: Bitcoin in Freefall: Panic Selling Grips the Market