Bitcoin’s short-term holders (STHs) supply in loss has surged to its highest level since the 2022 FTX collapse, showing renewed signs of systemic stress. Based on on-chain data, the total supply in loss has coincided with four consecutive lower lows in Bitcoin’s price trajectory. 

So far, realized losses have increased, and panic-driven exchanges have also intensified, although institutional players appear to be buying into the dip. For instance, BlackRock recently moved 4,800 BTC and 54,730 ETH to its Coinbase Prime. The trend has reinforced the current sustained retail capitulation and institutional accumulation. 

STHs with over 5.4 million BTC in supply continue to experience unrealized losses

According to Glassnode on-chain data, short-term holders, which are defined as addresses holding BTC for fewer than 155 days, are currently facing the most pressure since late 2022. At least 99% of STHs with a supply of over 5.4 million BTC are experiencing unrealized losses. The BTC supply in STH holdings represents a 24.7% increase since August, with the realized P/L ratio dropping to -1.4, similar to the FTX-era crash.

The trend highlighted by Glassnode data suggests that the most recent buyers have been caught at the top, creating a feedback loop, which means that continued falling prices trigger more selling pressure. The chart shows that the strength of STH losses mimics previous major capitulation events such as the FTX crash. 

Alongside the sustained capitulation, the crypto movement into centralized exchanges has increased. To date, over 2.1 million BTC have been deposited on Binance, with approximately 327,000 BTC being deposited in Q4 alone. The movements totaled over $1.1 billion, with funds being transferred from spot ETFs throughout October. 

Based on on-chain data delivered by SoSoValue, approximately $2.33 billion was withdrawn from Bitcoin ETFs in November, and $1.24 billion was withdrawn from Ethereum ETFs. Although Solana ETFs have sustained net inflows, with over $180 million this month, the market is experiencing a sustained lower capitulation.

The large flows into exchanges are being interpreted as preparation for selling or portfolio redistribution. The STH cost basis, which has historically been interpreted as a psychological support indicator, is now directly above Bitcoin’s current trading range, placing further downward pressure on recent buys. 

BTC is at risk of further liquidation if the downtrend persists

The current trend was amplified on October 30  when BTC surpassed $108,000 after the Federal Reserve showed signs of delayed rate cuts. The signal triggered over $820 million in liquidations, $653.6 million wiped from long positions, and $365.4 million from BTC-specific liquidations. So far, BTC has dropped below $94,000, placing the focus on the $ 92,000 -$ 94,000 range, aligning with the 6-12 month holder cost basis. 

According to a CryptoQuant analysis, long-term holders remain steady, with the Realized Cap at all-time highs. This means that deeper cycle-wide confidence remains intact even as STHs capitulate. Based on on-chain data by Lookonchain, institutional holders are using the downtrend as a strategic entry point. BlackRock deposited 4,880 BTC to Coinbase Prime and 54,730 ETH, representing a combined value of $643 million. Although the movement to exchanges has historically signaled selling intent, some industry experts have revealed that the movement signals accumulation as retail investors suffer stress. 

At the time of publication, Bitcoin was trading at $93,137, representing a 1.24% drop over the past 24 hours and an 11% drop over the past week. A sustained drop below $ 93,000 could trigger a selloff to the $ 85,000 support level or a potential reversal if the current institutional exchange flows sustain. 

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