Bitcoin Drops to $81K as Short-Term Holders Realize Losses

Bitcoin has fallen to $81,000 after losing support at $85,000, marking a significant low since early spring. The market sentiment has shifted from caution to panic, with discussions about a possible bear market.

Market Dynamics: Bitcoin's drop is seen by some as an orchestrated move to clear out weak investors before a potential recovery.
Short-Term Holder Activity: Analyst Axel Adler notes a structural shift, with the Realized P/L metric turning negative, indicating widespread losses among short-term holders (STHs). This historically leads to increased spot market pressure.

STH Panic and Historical Patterns

Current STH loss patterns resemble those during past market bottoms, such as July 2021 and the 2022–2023 bear market.
Fear-driven selling often results in exaggerated downside but eventually exhausts sell pressure, paving the way for stabilization.
Analysts suggest that once STH capitulation concludes, long-term holders usually absorb supply, potentially setting up for a rebound.

BTC Testing Key Demand Levels

Bitcoin's decline to the $83K–$84K range represents one of the steepest drops this cycle.
The breakdown intensified after losing the $92K and $90K supports, showing signs of capitulation-driven selling.
BTC is trading below key moving averages, signaling weakening momentum. A close below the 200-day moving average could lead to further declines.
Volume spikes confirm panic selling, but long lower wicks on candles and increased intraday volatility hint at potential selling exhaustion.

Bitcoin Short-Term Holder Realized P/L | Source: Axel Adler

Despite extreme sentiment, historical data suggests that peak STH panic followed by stability in long-term holdings could precede a strong recovery.