Key Points
- The declining profits of short-term Bitcoin holders could positively impact Bitcoin’s price.
- Increasing stablecoin inflows into the crypto market could contribute to a Bitcoin rally.
Bitcoin [BTC] briefly reached the $100,000 region on February 7th, but has since struggled to maintain that level. It is currently trading at $95,811.80, marking a 2.65% decline in the past 24 hours.
However, with profit margins remaining low for short-term holders, the incentive to sell is decreasing. This could potentially lead to an upward pressure on BTC’s price.
Market Reset Indicates Potential Upside
According to Glassnode’s Bitcoin Short-Term Holders Profit/Loss Ratio, the market seems to have reset with the ratio currently standing at 1.08. Short-term holders, defined as addresses that held BTC for less than 155 days before selling, are in slight profit. For every $1.08 of BTC sold at a profit, $1 is sold at a loss.
The ratio has dropped below its 90-day average, indicating a shift toward a more neutral market position as realized profits decline. This suggests that a significant breakout from the current trading level could follow.
Declining Profits Could Trigger a Supply Squeeze
The Market Value to Realized Value (MVRV) ratio for short-term BTC holders has also declined below its 90-day average, aligning with broader market conditions. At the time of writing, the STH-MVRV stood at 1.05, meaning BTC’s current price is only slightly above the average purchase price of short-term holders.
Such declines typically reduce selling pressure from short-term holders as they anticipate higher prices before selling. As fewer short-term holders realize profits, the circulating BTC supply contracts, potentially driving prices higher due to reduced selling pressure.
Stablecoin supply has significantly increased, indicating growing capital inflows into the crypto market. In 2025 alone, the total stablecoin supply increased by approximately $16.97 billion. This suggests increased liquidity, which often precedes higher crypto purchases. Given Bitcoin’s growing adoption, it is likely to benefit from this trend.