Bitcoin Short-Term Holders Sitting on 27% Unrealized Profits – Will They Cash Out or HODL?

Bitcoin’s latest rally has short-term holders (STHs) grinning—their unrealized profits just hit 27%. But now comes the real test: Will they take profits and trigger a pullback, or double down for the next leg up?

Market psychology at a crossroads

When STH profits spike this hard, history shows two outcomes. Either they diamond-hand through volatility (bullish), or they flood the market with sell orders (bearish). With BTC hovering near key resistance levels, this cohort’s next move could dictate the next market phase.

Wall Street’s watching—and probably overcomplicating it

Traditional finance analysts are scrambling to build models around this metric, ignoring the crypto truth: Sometimes traders just follow the damn trend. Either way, that 27% profit buffer gives BTC room to breathe—until the whales decide otherwise.

Source: CryptoQuant

The uptick in profitability for short-term holders has left analysts speculating over the potential impact on BTC’s price action. According to CryptoQuant analyst Axel Adler, the press time unrealized profits indicator for short-term holders, especially those holding coins for 1-3 months, sat at 27%.

This implied that short-term holders have made significant gains over the past 3 months and may be yet to close their holdings.

Currently, STHs are yet to start selling. In fact, the realized profits for this cohort sat at around 4.6k BTC at press time. Historically, a surge in unrealized profits for short-term holders has been followed by market distribution.

Source: Checkonchain

For example – Over the past 4 years, when this indicator surged to surpass 40%, these holders started selling, resulting in a higher selling pressure. Often, a higher selling pressure from short-term holders leads to a market correction.

Therefore, as per Adler’s observation, Bitcoin may be on track to hit the 40% threshold in 16 days. This, because the metric has been rising by 0.818% percentage points on a daily basis. If the trend continues with the same growth rate, the market could hit a critical decision point around 11 June 2025. Based on linear exploration, BTC could be trading around $162k.

Worth pointing out, however, that the analyst also noted that the trend exploration does not account for Trump’s random tweets or any black swans.

Therefore, if macroeconomic activities remain constant or positively impact BTC, the market will top in early June.

What’s next for Bitcoin?

Although Bitcoin’s short-term holders have made considerable gains, they are yet to enter into the distribution phase.

For starters, STH MVRV’s profits sat at around 1.14 at press time. Historically, this metric needs to rise above 1.2. A value above 1.2 usually precedes the distribution phase. Right now, there’s still more room for growth before the market sees massive selling from STHs.

Source: Checkonchain

Simply put, bitcoin short-term holders have not been selling as they perceive the prevailing market conditions as not being incentivizing enough to exit. Thus, STHs are still holding their assets, expecting more gains.

Therefore, until STHs start distributing, we could see Bitcoin recover from the recent pullback and continue with the rally. In the short term, BTC could recover and rally to $115k where the market will strengthen to attempt another leg up.

However, if the linear extrapolation holds as Adler’s projection, the cycle top will appear around $162k IF other factors remain constant.