Last week, Bitcoin dropped about 15%, from ~$88,000 to ~$74,400. Beneath the surface of prices, the structural behavior of capital from different market groups is what stands out.

🔍 Important On-Chain Observations

On April 7, a crucial moment:

- Short-term holders (STH) reduced realized capital by $10 billion, possibly due to transferring over $9 billion to long-term holders (LTH) and less than $1 billion in realized losses. This is the largest decrease in realized capitalization in this cycle.

- LTH increased realized capital by an additional $9.7 billion, indicating significant accumulation.

📊 This is not just a coincidence: the market is transferring coins from weak hands to strong hands.

April 8 continues the story:

- STH losses slowed down significantly (–$693 million), showing signs of exhaustion.

- LTH continued to accumulate, adding $1.13 billion to their cost basis—despite sideways price movement.

🧠 Interpretation

The divergence between STH and LTH is noteworthy:

- Short-term investors are panic selling: taking losses.

- Long-term investors are confidently buying: absorbing supply.

- This behavior often marks the late stage of a correction or the beginning of a recovery phase.

📐 Impact on Market Structure

- The STH group reduced supply: decreasing short-term resistance.

- The LTH group is consolidating positions: a signal of confidence in long-term potential.