Bitcoin's recent price recovery above $97,000 is revealing a crucial shift in investor behavior, with on-chain data indicating both short-term and long-term holders are showing signs of restraint that could support a push toward new all-time highs.
Short-term holders (STHs), defined as those holding Bitcoin for less than 155 days, are finally experiencing relief after a period of significant losses. Data shows the average unrealized loss for STHs has shrunk from over 10% to approximately 6.4%. Historically, when STH losses exceed 10%, Bitcoin enters a capitulation phase that often forms a market bottom. "The STHs are finally leaving an extreme discomfort zone," noted analyst Darkfost. The recent rally has moved the price closer to the STH Realized Price—the average cost basis for coins acquired in the last 155 days—which currently sits at $99,412.
A notable shift in STH behavior is the move from loss-selling to profit-taking. During the rally, STHs deposited 41,800 BTC to exchanges. Analyst Maartunn highlighted that STHs are now more focused on taking profits than cutting losses, suggesting improved sentiment as the market recovers.
Simultaneously, long-term holders (LTHs), who hold coins for at least 155 days, are demonstrating remarkable restraint. According to Bitfinex's latest Alpha report, LTH selling pressure is decreasing at a critical technical juncture. While LTHs remain net sellers in the historically significant $93,000-$110,000 resistance zone, their weekly selling volume based on realized profits has declined to approximately 12,800 BTC. This represents a significant reduction from previous weeks.
Bitfinex's analysis suggests this slowing sell-off could be a key factor in Bitcoin's ability to break through the $93,000-$110,000 range. The recent price surge to $97,850 triggered the largest short squeeze in 100 days, improving market structure by clearing leveraged positions. The report outlines a conditional pathway: if the trend of decreasing LTH selling persists, reduced natural resistance could allow Bitcoin to surpass the $100,000 psychological threshold and resume its rally.
Historical precedents from the 2017 and 2021 bull markets show that similar reductions in long-term holder distribution often preceded significant upward movements. However, the current cycle is distinguished by greater institutional participation, improved market maturity, and broader global adoption, which may be influencing holder psychology.
Market observers are now closely watching whether Bitcoin can maintain its recovery and reclaim the STH cost basis at $99,412. A move above this level would signal that short-term holders are entering profit, potentially further supporting the rally. The evolving dynamic between holder behavior, technical resistance, and market sentiment will be central to determining Bitcoin's trajectory in the coming weeks.
