Bitcoin Short-Term Holders Capitulate: Realized Loss Ratio Hits 6-Month Low

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Bitcoin is showing signs of recovery after several days marked by selling pressure, volatility, and fear across the crypto market. Following the sharp flash crash on October 10, when BTC briefly plunged to around $103,000, the price has since rebounded and is now testing supply near the $111,000 level. This move has brought a temporary sense of relief to traders, but on-chain data suggests that the market is still under stress.

According to CryptoQuant, Short-Term Holders (STHs) — investors who typically hold Bitcoin for less than 155 days — are now selling below their cost basis, a clear sign of capitulation. Historically, such capitulation events have often marked late stages of a correction, as weak hands exit the market while stronger players accumulate.

While this could signal that Bitcoin is nearing a local bottom, uncertainty remains high. The coming days will determine whether this rebound has the strength to sustain — or if the market will face renewed downside pressure as global risk sentiment remains fragile.

Short-Term Holders Signal Capitulation

According to CryptoQuant analyst Maartunn, the Short-Term Holder (STH) Spent Output Profit Ratio (SOPR) has dropped to 0.98, marking its lowest level since April 2025. This reading supports the trend that STHs are now selling at a loss, a sign of capitulation within the most reactive segment of the market.

Historically, such declines in STH SOPR have aligned with late-stage corrections or market bottoms, as weaker hands are flushed out and coins transfer to stronger holders. During similar phases in 2023, 2024, and early 2025, this metric has acted as a contrarian signal, often preceding major rebounds. However, Maartunn cautions that while capitulation is unfolding, confirmation of a recovery still depends on whether Bitcoin can hold above its realized price levels and key moving averages.

The market now finds itself at a critical juncture. Bitcoin has rebounded from the $103,000 flash crash low to hover around $111,000, but momentum remains fragile. A sustained close above the $111,500–$113,000 zone could reinforce short-term bullish structure, while failure to hold current support may open the door to deeper corrections toward $100,000 or below.

If the SOPR stabilizes and begins to rise again, it could confirm a shift from capitulation to re-accumulation — the early stage of a new upward trend. But if selling pressure persists and sentiment weakens further, the market risks entering a prolonged consolidation phase before the next bullish leg begins. For now, Bitcoin remains on edge, caught between recovery hopes and macro-driven uncertainty.

Bitcoin Attempts Short-Term Recovery, But Resistance Looms Ahead

Bitcoin is showing early signs of a short-term rebound, recovering from the October 10 crash that sent prices below $104,000. On the 4-hour chart, BTC is currently trading near $111,200, attempting to reclaim short-term moving averages (50 and 100 SMA) after several days of bearish momentum. This bounce reflects a shift in intraday sentiment, but the market remains cautious.

The next key resistance lies around $113,000–$114,000, where the 200 SMA aligns with previous support turned resistance. A breakout above this zone could open the door to a test of $117,500, a major liquidity area that capped rallies earlier this month. However, if Bitcoin fails to clear this level, it risks falling back toward $107,000–$106,000, where strong demand previously emerged.

Momentum indicators are improving but not yet convincing. Volume remains subdued, and funding rates continue to hover in negative territory — suggesting traders still lean bearish. This setup often precedes larger short squeezes, but confirmation is still lacking.

Bitcoin’s short-term structure favors cautious optimism. Holding above $110,000 would support the recovery narrative, while rejection at higher levels could quickly trigger another retest of the recent lows. The next few sessions will be decisive for confirming trend direction.

Featured image from ChatGPT, chart from TradingView.com

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