Bitcoin Holders Shift: Long-Term Distribution Meets Short-Term Losses

Key Takeaways

• Bitcoin’s long-term holders are distributing.
• Short-term holders bear most of the losses.
• Has Bitcoin started a long-term bear market?
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Bitcoin’s performance in 2025 has left holders frustrated. Despite positive news, including Donald Trump’s announcement of a strategic Bitcoin reserve and the first-ever White House crypto summit, the Bitcoin price has been in a free fall, reaching a low of $76,600 on March 11.

While sentiment leans bearish, let’s analyze some on-chain indicators to understand how long-term holders (LTH) and short-term holders (STH) are handling the correction.

Short-Term Holders Capitulate

Bitcoin’s Net Unrealized Profit/Loss (NUPL) indicator helps determine market sentiment by measuring the unrealized profit and losses and comparing them to the market cap. High values have historically coincided with a Bitcoin cycle top.

The indicator is divided into the short- and long-term holders thresholds by splitting UTXOs of shorter and longer than 155 days.

The STH-NUPL indicator shows that short-term holders have severe losses at -0.06. This means that STHs have unrealized losses of 6% of the market cap. This value led to bounces in the bull market (black circles).

However, the indicator has fallen nearly ten times lower to -0.60 when the Bitcoin price started its bear market. Thus, the STH-NUPL could continue falling if the Bitcoin price is in a bear market.

Long-Term Holders Distribute

In the two most recent cycles, the LTH-NUPL increased above 0.75, trading there for several months before the market peaked. It did so for six months in 2017 and four months in 2021.

The current Bitcoin cycle has been different, since the on-chain indicator (black circle) barely crossed 0.75 for less than a month before falling. The indicator is now at 0.6.

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Previously, movements above 0.75 followed by a decrease below have each time meant that the Bitcoin price has started its bear market.

Periods of high spending levels alongside the Market Value to Realized Value (MVRV) provide better insight into long-term Bitcoin holders’ actions.

Historically, Bitcoin peaks when long-term holders sell at volume with MVRV values above 3.5 (green).

The pronounced selling usually lasts for several months before the market reverses.

These conditions transpired twice in the current cycle: once when BTC first broke out above its all-time high in March 2024 and again during the November rally.

The long-term holder cost basis (blue) is $24,896. Because of the ongoing BTC price decline, the average LTH is less than 350% in profit (black circle).

In previous cycles, a fall below this level after a period of LTH selling confirmed the bear market had started.

Bitcoin’s Bear Market Arrives

The Bitcoin price has already fallen over 20% since its all-time high. Long-term holders distributed before the drop, while short-term ones bear the brunt of the losses. Data from various LTH and STH indicators suggest Bitcoin is now in a bear market.