Analysis: Bitcoin Short-Term Holder Supply Continues to Decline, Market May Be Approaching End of Bear Cycle

BlockBeats News, August 13th, CryptoQuant analyst Darkfost posted, stating that the number of Short-Term Holders (STH) in the Bitcoin market is decreasing, which is a positive signal. Currently, the BTC supply held by STH has significantly decreased, with less than 1 day holding accounting for 1.2%, 1 day to 1 week holding accounting for 2%, 1 week to 1 month holding accounting for 5.6%, 1 to 3 months holding accounting for 6.7%, and 3 to 6 months holding accounting for 8.1%.

Darkfost pointed out that this trend has occurred at the end of each bear market. On the one hand, this indicates that the proportion of Long-Term Holders (LTH) is increasing. Compared to the active and market-sensitive STH, BTC held by LTH is less likely to move.

On the other hand, the decrease in STH proportion also indicates that market demand has not yet returned. Every BTC purchase will create new STH UTXOs. When market demand is strong, the proportion of supply held by STH will rise rapidly and may ultimately reach a peak near the market top.

Darkfost believes that the market is currently approaching a "negative extreme" state, where market attention and demand are still at relatively low levels, while the number of STH continues to decrease, which is typically a positive signal.