Bitcoin’s Weak Hands Finally Exhausted? BTC Flashes Early Bullish Signals as Recovery Begins

Bitcoin shakes off the paper hands—early momentum suggests the sell-off may be over.

The Capitulation Cliff

Retail traders folded first—panic selling at the bottom like clockwork. Weak hands dumped holdings after the recent dip, creating the classic washout pattern that typically precedes a rebound.

On-Chain Resilience

Long-term holders aren’t blinking. Accumulation addresses show renewed buying, while exchange outflows suggest investors are moving coins into cold storage—again.

Technical Bounce

BTC reclaimed key moving averages. The $60K support level held firm, frustrating bears who bet on a deeper crash. Shorts are getting squeezed as momentum builds.

Macro Whispers

Inflation data softened—suddenly fiat looks fragile again. Traders pivot toward hard assets, and Bitcoin’s scarcity narrative regains traction. Gold’s boring; digital gold’s volatile—but it moves.

Institutional Silence

BlackRock’s IBTC saw modest inflows—not explosive, but steady. Wall Street’s playing the long game while retail traders chase memecoins. Priorities.

Regulatory Fog

The SEC’s still dragging its feet—no clarity, no problem. Crypto markets operate fine in gray areas. Traditional finance would collapse under this much uncertainty.

Bottom Line: Weak hands are out. Strong hands are loading up. History says this is how rebounds start—but then again, history also says don’t celebrate until the bankers start buying the dip with your own leveraged money.

Key Takeaways

Bitcoin short-term holders realized 2.6k BTC in losses as STH MVRV dipped below 1. Long-term holders stayed firm, and Seller Exhaustion hinted that selling pressure may be easing.

Since hitting $124k nearly three weeks ago, Bitcoin [BTC] faced strong downward pressure, hitting a low of $107,270. 

As of this writing, bitcoin traded at $109,540, up 0.56% in 24 hours. Before these moderate gains, BTC was in a strong downtrend, declining 3.74% monthly.

Naturally, amid this slide, short-term holders started capitulating. And that spelled trouble.

Bitcoin short-term holders are capitulating

According to analyst Burak Kesmeci, Bitcoin’s Short-Term Holder (STH) MVRV fell below 1 after 132 days in profit.

This was the first dip since February, when the ratio stayed under 1 for 58 days. BTC then fell as low as $79k.

Source: Bitcoin Magazine Pro

In fact, a drop below 1 means STHs are sitting at losses. The STH Unrealized Profit/Loss Ratio confirmed this, standing at 0.955.

Source: Checkonchain

On top of that, Realized Losses spiked. STH Realized Loss surged from 623 BTC to 2.6k BTC in just two weeks.

Such capitulation reflects fear-driven exits and adds short-term sell pressure. Yet history shows large STH losses often precede stronger rebounds.

Source: Checkonchain

Historically, a high STH Realized Loss occurs NEAR market bottoms as weak hands get flushed out. This set the stage for stronger hands to accumulate, signaling potential for a rebound.

Long-term conviction holds firm

While STH has turned to aggressive selling, Bitcoin Long-Term Holders (LTHs) stayed steady. According to Checkonchain, LTH’s Sell-side Risk fell sharply after peaking four days ago.

Source: Checkonchain

At press time, this metric was approximately 0.0017, indicating strong market confidence from LTHs, as they prefer holding their positions rather than selling.

Amid declining profit margins, LTHs are not highly incentivized to exit positions, a clear sign of market conviction from the cohort.

Seller exhaustion in play

According to AMBCrypto’s analysis, Bitcoin faced strong downward pressure, which caused STHs to panic-exit the market.

However, it seems they have sold enough and are getting exhausted. In fact, the Seller Exhaustion Constant dipped through August but has started to rise again.

Source: Checkonchain

This pattern often emerges as selling slows, easing pressure and setting the ground for recovery.

As a result, BTC could stabilize and aim for $112k if demand returns. However, if STH selling persists, a slide toward $105,003 remains possible.