Over the past week, Bitcoin has experienced a ~15% drawdown, sliding from ~$88,000 to ~$74,400. While price action often captures headlines, the real story lies beneath the surface, in the structural behavior of capital held by different market cohorts.
š Key On-Chain Observations
On April 7th, we witnessed a pivotal moment:
- Short-Term Holders (STH) realized over $10.1 billion in lossesātheir largest single-day realized cap decrease in this dataset.
- In parallel, Long-Term Holders (LTH) increased their realized cap by $9.7 billion, indicating large-scale accumulation.
š This is not merely a coincidence: this is the market transferring coins from weak to strong hands.
The narrative continued into April 8th:
- STH losses slowed significantly (ā$693 million), showing signs of capitulation exhaustion.
- LTHs continued accumulating, adding $1.13 billion to their cost basisādespite sideways price action.
š§ Interpretation
This structural divergence between STHs and LTHs is significant:
- Short-term investors are exiting in panic: locking in losses.
- Long-term investors are stepping in with conviction: buying weakness and absorbing supply.
This behavior has historically marked the late stages of corrections or the early phase of recovery.
š Implications for Market Structure
- The STH cohort is shedding supply: reducing near-term overhead resistance.
- The LTH cohort is strengthening its hold: a sign of growing belief in long-term upside.
The market is likely entering a reaccumulation or bottoming phase, rather than sustained distribution.
š§ Strategic Takeaway
April 7th, 2025 may be remembered as a structural inflection point. The magnitude of realized losses by STHsāpaired with synchronized LTH absorptionāhas all the hallmarks of a capitulation bottom being quietly formed.
Written by onchained
