Bitcoin has been under intense selling pressure in recent sessions, leaving market participants increasingly cautious about near-term direction. On Wednesday, BTC briefly surged from the $86,000 area toward $90,000, offering short-term investors a moment of relief after weeks of downside volatility.

That rebound, however, proved short-lived. Price quickly retraced back to the $86,000 level, once again stalling bullish momentum and reinforcing the perception that sellers remain firmly in control.

This failed recovery attempt has weighed heavily on sentiment, particularly among short-term holders who entered positions at higher levels during the previous consolidation range. According to a report by Axel Adler, on-chain data reveals that this cohort has entered a clear stress regime. Bitcoin’s price has fallen below the average purchase price of short-term holders, a condition that historically increases the probability of reactive selling behavior.

The stress is further reflected in the Short-Term Holder Spent Output Profit Ratio (STH-SOPR, 30-day), which has declined to 0.98. This reading indicates that short-term holders are, on average, realizing losses when they sell. Such environments often coincide with deteriorating confidence and heightened sensitivity to further downside moves.

With BTC unable to hold recent relief rallies and short-term participants increasingly underwater, the market enters a fragile phase. The coming days will be critical in determining whether this pressure evolves into deeper capitulation or stabilizes into a base-building process.

Short-Term Holders Under Stress as Loss-Taking Accelerates

Adler explains that the Short-Term Holder Spent Output Profit Ratio (STH-SOPR 30D) is a critical gauge of short-term market stress, as it measures whether recent coin sales are occurring at a profit or a loss. Values above one indicate that short-term holders are selling profitably, while readings below one signal loss realization.

Historically, sustained periods below one reflect deteriorating confidence and raise the risk of further downside, as loss-taking behavior can cascade into additional sell pressure. A continued decline in SOPR would likely intensify this dynamic and open the door to new local lows.

By contrast, a meaningful recovery would require the metric to reclaim and hold above the one level, signaling that selling pressure is being absorbed and losses are no longer dominant.

This stress is reinforced by the Short-Term Holders Positive vs Negative Sentiment chart. The indicator classifies holders based on whether they are in profit or at a loss. Over the past five weeks, sentiment has shifted decisively toward the orange and purple zones, representing negative positioning.

The growing dominance of underwater holders increases the probability of panic-driven selling. Together, both charts deliver a consistent message: short-term participants are under pressure, and the current environment remains fragile until clear signs of relief emerge.

Bitcoin Tests Critical Support as Bears Persist

Bitcoin continues to trade under pressure, with the chart showing price consolidating around the $87,000 area after a sharp corrective move from the October highs near $125,000. The rejection from the upper range marked a clear shift in market structure, as BTC lost the 50-day and 100-day moving averages and failed to reclaim them on subsequent rebounds. The blue moving average has now turned downward, reinforcing the short- to medium-term bearish bias.

Price is currently hovering just above the 200-day moving average, plotted in red, which sits near the $86,000–$88,000 zone. This level represents a critical area of long-term demand and structural support. Historically, sustained closes below the 200-day average tend to coincide with deeper corrective phases or prolonged consolidation.

Volume dynamics add to the cautious outlook. Selling pressure expanded significantly during the breakdown in October and November, while recent rebound attempts have occurred on relatively muted volume. This suggests that short-covering and tactical buying, rather than strong spot demand, are driving price stabilization.

Structurally, Bitcoin is forming lower highs since the peak, keeping the broader trend vulnerable. A recovery scenario would require BTC to reclaim the $95,000–$100,000 region and hold above the declining moving averages. Until then, the chart favors continued consolidation or further downside risk around the long-term support zone.

Featured image from ChatGPT, chart from TradingView.com

Bitcoin experienced a sharp bounce above the $90,000 price mark, but this rise was brief and was cut short by the prevailing volatile market environment. With the persistent waning price action observed over the past few weeks, the once lucrative BTC on-chain moves are no longer paying off as profits have dropped sharply.

Profits From Bitcoin On-Chain Flows Falls

The current Bitcoin market is entering a noticeably different phase, and the evidence is starting to show it. A key on-chain metric indicates that the once-reliable rewards from transferring coins throughout the network are diminishing, suggesting that it is becoming increasingly difficult to profit from rapid price fluctuations.

With volatility decreases and participant behavior changes, BTC may be moving away from a trader-driven ecosystem. This development is spotted in the Bitcoin Spent Output Profit Ratio (SOPR) Trend Signal metric. Bitcoin SOPR Trend Signal is a powerful metric that spots price regions where BTC has been moved at significant profit or loss.

In the past, this crucial indicator has produced precise signals for local highs and lows. As reported by Alphractal, an advanced investment and on-chain data analytics platform, the metric is currently experiencing a steady decline. A decline in the SOPR Trend Signal hints at BTC being moved with progressively lower profits or moving toward loss-making transfers.

Furthermore, Alphractal highlighted that a continued drop in this metric is typical of a bear market phase. However, a true bottom of the price could occur only when green signals appear on the chart. Currently, all indications on the chart suggest that it will take several months for this trend to be validated.

Joao Wedson, the founder of Alphractal, shared his insight on the decline, noting that it is part of the longstanding Bitcoin fractal cycle. Given that the factors influencing its market behavior have expanded, many believe that BTC’s cycles have changed and that this time it is different.

However, on-chain analysis offers a clear view of BTC continuously following its fractal cycle just as it did before. After his analysis of the trend, Wedson claims that nothing in the Bitcoin market cycle has changed so far.

According to the expert, BTC has been one of the most predictable investment assets in the ever-evolving cryptocurrency sector. Meanwhile, many continue to maintain that it must adhere to traditional markets, even though statistics do not support this.

BTC Unrealized Loss At 10%

After the pullback in price, Bitcoin’s unrealized losses are at a level that signals resilience rather than widespread distress. CryptoRank, a leading data analytics platform and crypto industry researcher, revealed that unrealized losses now make up 10% of market capitalization.

Despite the recent drop in Bitcoin prices, this implies that the vast majority of holders are still in profit, potentially contributing to hesitation toward further upside in BTC’s price. Interestingly, this lessens panic-driven selling pressure and signals that the market has already absorbed most of its negative risk.

Bitcoin continues to struggle below the $90,000 level, failing to reclaim key resistance as bulls attempt to defend current demand zones. Price action reflects a market under pressure, with momentum fading after a prolonged correction. From its all-time high, Bitcoin has now retraced roughly 30%, placing the asset firmly in a corrective phase where uncertainty and caution dominate trading behavior.

According to a report from Axel Adler, on-chain data confirms that market stress is no longer limited to price alone. Two key indicators—the Short-Term Holder Spent Output Profit Ratio (STH SOPR) and the P/L Block—are signaling broad loss realization among participants and a deterioration in overall market sentiment.

These metrics provide insight into the behavior of short-term holders, who are often the most sensitive to price swings and macro uncertainty. Together, these signals suggest that Bitcoin remains in a fragile state, where confidence has weakened, and recovery attempts face increasing resistance.

STH SOPR and P/L Block Confirm Capitulation Pressure

Adler explains that the Short-Term Holder Spent Output Profit Ratio (STH SOPR) measures whether coins held for less than 155 days are being sold at a profit or a loss. When the indicator falls below one, it signals that recent buyers are realizing losses.

Currently, the 7-day moving average of STH SOPR has slipped into the red zone, with a reading near 0.99. This confirms that short-term holders are, on average, selling Bitcoin below their acquisition price—a behavior typically associated with heightened stress and emotional selling.

Historically, similar SOPR conditions have marked local capitulation phases, when selling pressure peaks and weaker hands exit the market. As long as the SOPR 7-day average remains below one, short-term participants stay in “stress mode.”

Adler notes that a meaningful improvement would require a sustained move back above one on a daily close, signaling that sellers have exhausted supply and buyers are once again absorbing sell-side pressure.

Complementing this signal, the P/L Block indicator tracks the aggregated profit and loss state of market participants. The current red block reflects loss dominance, with a P/L Score of minus three—classified as pronounced stress.

With Bitcoin down 30% from its all-time high and 30-day returns negative, both indicators align, reinforcing a clear picture of capitulation among short-term holders.

Bitcoin Price Analysis: Weekly Structure Remains Critical

The weekly chart shows Bitcoin trading around the $89,900 level after a sharp rejection from the $120,000–$125,000 region. Price has retraced aggressively but is now attempting to stabilize above the rising 200-week moving average (green), a level that has historically defined long-term trend validity. So far, this area is acting as dynamic support, suggesting that buyers are defending higher-cycle structure despite broader market weakness.

However, Bitcoin remains below the 50-week moving average (blue), which is now sloping downward. This configuration reflects a loss of medium-term momentum and confirms that the market is still in a corrective phase rather than a resumed uptrend.

The 100-week moving average (red) continues to rise well below price, reinforcing that the broader macro trend remains intact, but also highlighting how much excess was built during the prior rally.

Volume has declined during the recent consolidation, signaling indecision rather than aggressive accumulation. This typically precedes a volatility expansion. From a structural perspective, holding above the $85,000–$88,000 zone is critical. A sustained breakdown below the 200-week MA would increase the probability of a deeper retracement toward the $75,000–$80,000 region.

Conversely, reclaiming the 50-week MA near $95,000 would be an early signal that downside pressure is fading. Until then, Bitcoin remains range-bound, with long-term support holding but momentum still fragile.

Featured image from ChatGPT, chart from TradingView.com