Key Points
- Declining profits for short-term holders may positively affect Bitcoin’s price due to reduced selling incentives.
- Increasing stablecoin inflows into the crypto market could also contribute to Bitcoin’s rally.
After reaching nearly $100,000 on February 7th, Bitcoin (BTC) has had difficulty maintaining this level and is currently traded at $95,811.80, a 2.65% decrease over the last 24 hours.
However, with profit margins remaining low for short-term holders, there is less motivation to sell, potentially leading to a rise in Bitcoin’s price.
Market Reset Indicates Potential Upside
Glassnode’s Bitcoin Short-Term Holders Profit/Loss Ratio suggests the market has reset, with the ratio currently at 1.08. Short-term holders, those who have held Bitcoin for less than 155 days before selling, are in slight profit as the ratio is just above 1. This means for every $1.08 of Bitcoin sold profitably, $1 is sold at a loss.
This ratio is below its 90-day average, indicating a shift towards a more neutral market position as realized profits decrease.
Decreased Profits Could Lead to Supply Squeeze
The Market Value to Realized Value (MVRV) ratio for short-term Bitcoin holders has also fallen below its 90-day average, reflecting overall market conditions. Currently, the STH-MVRV is at 1.05, indicating Bitcoin’s current price is only slightly above the average purchase price for short-term holders.
Such declines typically lessen selling pressure from this group, as they wait for higher prices before selling.
As fewer short-term holders realize profits, the circulating Bitcoin supply contracts, potentially driving prices up due to decreased selling pressure.
Stablecoin supply has significantly increased, suggesting a rise in capital inflows into the crypto market. In 2025 alone, the total stablecoin supply rose by roughly $16.97 billion. This increased liquidity often precedes higher crypto purchases.
Given Bitcoin’s growing adoption as a strategic reserve asset for governments and among institutional investors, it is likely to benefit from this trend.
