Bitcoin Surges While Short-Term Holders Cash Out—Here’s Why

BTC’s price rallies, but STHs (short-term holders) are hitting the sell button hard. Market psychology or smart profit-taking? You decide.

Price pumps always trigger two reactions: diamond hands cheering and weak hands fleeing. This time? Classic ’buy the rumor, sell the news’ behavior—even crypto markets aren’t immune to human nature.

Meanwhile, Wall Street ’experts’ still can’t decide if Bitcoin’s a currency, an asset, or a threat to their bonus checks. Stay tuned for the next episode of ’Traditional Finance Struggles With Innovation.’

STH supply fails to rise

Recent data showed a stark deviation from past bull cycles: STHs are not accumulating even as Bitcoin trades near all-time highs.

In previous cycles, STH supply ROSE during price rallies, fueling momentum. This time, it didn’t.

Source: Alphractal

Instead, STH supply remained muted, mirroring late-stage patterns from previous cycles where coins change hands at the peak.

In contrast, LTHs are distributing, further highlighting the shift in conviction.

This lack of fresh accumulation showed that current demand may be fragile and foreshadows a top-heavy market.

When the STH supply starts to decline while price rises, it typically signals a slowing of demand and rising sell pressure – a sign of bull cycle maturity.

STH Realized Price nears spot

On top of that, the STH Realized Price has now reached $94.5K—historically a late-cycle marker.

Source: Alphractal

Many recent buyers are holding unrealized gains, signaling potential profit-taking.

Meanwhile, LTH Realized Price remains at $33K, forming a wide divergence.

Such a gap has often preceded corrections, especially when the STH band flattens or crosses spot price from above.

The $94.5K STH RP may serve as a final support before losses, a typical turning point in past cycles. However, the current setup suggests we’re beyond the bullish crossover and into distribution territory.

Distribution is heavy, but momentum loses steam

There’s a dominant wave of distribution from STHs, with red bars consistently outpacing green accumulation spikes since early 2025.

Despite Bitcoin’s strong price action, the persistent Net Outflows suggest that recent buyers are increasingly offloading their positions into strength.

Source: Alphractal

This pattern often precedes market cooldowns, especially with STH realized price above spot. Without renewed accumulation, the market may struggle to maintain current levels, as STHs use rallies as exit liquidity.

While a post-October 2025 correction seems likely due to fading demand and halving cycles, some upside may remain.

For now, STH distribution is back.