Key Points
- Bitcoin’s short-term holder (STH) supply is under pressure due to macroeconomic uncertainty and market volatility.
- If Bitcoin falls below $72k, the risk of forced liquidations and increased sell-side pressure could escalate.
On 9th April, the announcement of a 90-day pause on tariffs by U.S. President Donald Trump led to an 8.27% single-day surge in Bitcoin (BTC). The next day, U.S. core CPI inflation fell below 3.0% for the first time since March 2021, causing Bitcoin to rise by 3.36% to $82,532.
Despite these macroeconomic boosts, the market might face a significant test in the near future. The realized price for Bitcoin’s Short-Term Holders (STHs) was $93k, far above BTC’s current level. This raises the question of whether STHs will hold their positions if the Federal Reserve delays rate cuts, or if they will capitulate due to increasing resistance.
Bitcoin’s STH Supply and Capitulation Risk
Bitcoin’s STH supply is nearing a critical inflection point. On 10 February, STH-held BTC reached a four-year peak of 400k, but has since declined to 360k, indicating net distribution. This decline coincided with Bitcoin breaching three key support levels, suggesting sustained sell-side pressure.
On-chain data shows that most of these holdings were accumulated around $93k. With BTC trading below this price, approximately 360k BTC is in an unrealized loss state, increasing the risk of capitulation. If Bitcoin falls to the lower band at $72k, profit margins for these holders would decrease by 22%, adding more pressure on short-term conviction. Historically, a breach of the lower band has led to forced liquidations.
However, if Bitcoin reclaims $93k, it could flip STH’s positioning back into profit, potentially reducing supply-side risk and reviving bullish momentum.
Macroeconomic Volatility and Short-Term Confidence
From a macro-structural perspective, Bitcoin’s price continues to consolidate below the crucial $85k resistance level. Repeated rejections at this level indicate a liquidity zone that, if breached, could trigger a wave of short liquidations.
At the same time, Bitcoin’s Estimated Leverage Ratio (ELR) has fallen below its early March baseline, indicating a sustained deleveraging phase. Futures traders have become more risk-averse, with a noticeable decrease in high-leverage positioning.
Despite these challenges, Bitcoin has shown some resilience. Following the tariff-related market turbulence, BTC’s market cap experienced only a $90 billion drawdown, a relatively small amount compared to other risk assets.
However, with the Federal Reserve unlikely to cut interest rates soon, macro uncertainty could push short-term holders to exit. Many of them bought around $93k, and if the price doesn’t recover soon, they may sell to avoid deeper losses.
With fear still high, speculative demand low, and key resistance levels overhead, a dip to $72k remains a possible scenario before Bitcoin can attempt a sustained breakout.
