Bitcoin STH Capitulation Signal Flashes – History Says a Monster Rally Could Be Next
Blood in the streets? For Bitcoin's 'short-term holders,' capitulation mode is officially on. And if past cycles hold true, this could be the launchpad for the next leg up.
Here's why traders are watching this pain signal like hawks.
The STH SOPR (Spent Output Profit Ratio) just dipped below 1—meaning newbie investors are dumping coins at a loss. Textbook panic behavior.
But here's the kicker: Every time this happened in 2016, 2019, and 2020, Bitcoin ripped 200%+ within months. The bigger the flush, the harder the pump.
Of course, Wall Street's 'risk managers' will call this reckless speculation—right before quietly front-running the rally with OTC desks. Some things never change.
One question remains: Will you fade the crowd or become exit liquidity?
Bitcoin Faces Critical Test As Market Awaits Next Move
Bitcoin is once again at a crucial juncture, hovering between its all-time high of $112,000 and key support at $105,000. Bulls are working to break above resistance and spark the next leg higher, while bears aim to drag the price below support and shift momentum in their favor. This standoff has created a volatile and indecisive environment, with price swinging between these levels for days. So far, neither side has been able to establish dominance, leaving traders on edge as the next major MOVE begins to take shape.
Adding to the broader market Optimism is the US stock market, which has just reached a new all-time high. Many analysts see this as a leading indicator for crypto, suggesting that Bitcoin and altcoins could be next in line to follow the rally. Liquidity conditions are improving, and risk appetite is returning, setting the stage for a potential breakout if Bitcoin can overcome resistance.
Darkfost recently shared a key on-chain signal supporting this outlook. According to his analysis, the Short-Term Holder Spent Output Profit Ratio (STH SOPR) has dropped below 0.995. Historically, this level indicates that short-term holders are capitulating and selling at a loss—a behavior often seen at local bottoms. When STHs exit in fear, it tends to clear the way for stronger hands to accumulate, laying the groundwork for the next leg up.
With bullish macro signals and on-chain metrics aligning, Bitcoin’s current range could soon give way to a major move. Whether that breakout happens above $112K—or a breakdown below $105K—will determine the tone of the next chapter in this market cycle. For now, all eyes remain on Bitcoin.
BTC Price Action: Testing Key Resistance
Bitcoin is currently trading at $107,321, consolidating just below the critical $109,300 resistance level. This zone has acted as a ceiling for over a month, with multiple failed attempts to break above. The latest recovery from the $103,600 support has been strong, with BTC reclaiming all key moving averages—50 SMA ($105,774), 100 SMA ($105,866), and staying well above the 200 SMA ($97,046)—showing a shift in short-term momentum toward the bulls.
The 12-hour chart displays a clear pattern of higher lows, indicating that buyers are stepping in with increasing confidence. However, the lack of volume during this latest push suggests hesitation, as traders await a confirmed breakout before fully committing. For bitcoin to gain significant upside traction, it must close multiple candles above $109,300, turning resistance into support.
If bulls fail to break above resistance soon, the $105,000–$103,600 zone becomes the critical area to hold. A breakdown below this range could open the door for a deeper retracement toward the 200 SMA around $97,000. Until then, BTC remains in a neutral-to-bullish posture, with the market watching closely for a decisive move that could shape the next leg of this cycle.
Featured image from Dall-E, chart from TradingView
