Bitcoin in the pain zone: over 95% of short-term holders are underwater

On-chain analytics platform Glassnode has recorded one of the most severe drawdowns for short-term bitcoin holders in the current cycle: the share of supply held by recent buyers that's currently in profit collapsed to a low of 0.6% and has only marginally recovered to 3.3%. For comparison, the four-year average for this metric is 55%. In other words, more than 95% of recent bitcoin buyers are currently trading at a loss.

What the Metrics Show

The STH-MVRV indicator (the ratio of market price to the average cost basis of short-term holders) recently dropped to 0.81 and has only slightly recovered to 0.83. A reading below 1 means the average recent bitcoin buyer is currently underwater by roughly 17-19%. Buyers from May have been hit especially hard: Glassnode estimates that cohort is down about 17-20% from their entry price on average.

Capitulation Is Already Happening

Amid the losses, some holders are already locking them in: in June, more than 53,000 BTC flowed onto exchanges from short-term holders within a single 24-hour window — and essentially every coin in that flow was sold below its purchase price. Analysts describe it as one of the most pronounced capitulation episodes of the current bitcoin cycle.

What This Means in Practice

In on-chain analytics terms, a mass shift of recent buyers into sustained unrealized loss has historically coincided with the late stages of bear markets — the point where the most price-sensitive investors finally capitulate, after which sell-side supply gets exhausted. The signal alone doesn't guarantee an immediate price reversal, but this is exactly the kind of dynamic Glassnode and other analytics platforms typically associate with a bottoming process, rather than the continuation of a sustained rally.

This material is for informational purposes only and is not investment advice.