Bitcoin Short-Term Holders Capitulate as Realized P/L Ratio Plunges to -1.4

Bitcoin's price has declined to $107,544, marking a nearly 3% drop in the last 24 hours, as it struggles to maintain the $110,000 level after a brief upward move on Sunday. This downturn is attributed to market volatility exacerbated by US-China tariff tensions, leading to significant realized losses for short-term holders.

On-chain data reveals that the realized profit/loss ratio for Bitcoin short-term holders has sharply fallen to -1.4, a level comparable to the April 2025 correction. According to Darkfost, a CryptoQuant author, this negative shift indicates growing pain among these investors, with many selling at a loss, which signals capitulation. He highlighted that such phases typically mirror weak hands exiting the market, often preceding major accumulation zones and long-term recovery.

Additionally, long-term Bitcoin holders have reduced their exposure, with a 2.2% decline in supply held in October, translating to the distribution of over 330,000 BTC. This is a modest reduction compared to previous declines of 5.2% in December 2024 and 5.05% in March 2024. Despite the price decline, trading volume has surged by more than 55% in the last 24 hours, suggesting increased market activity.

Analysts interpret this pattern as part of a final correction phase, where realized losses stabilize and volatility spikes, potentially paving the way for a bottom formation and eventual rebound, consistent with historical cycle resets.