Bitcoin Holders Braced for More Losses: Key Metric Signals Pain

Bitcoin (BTC) has been navigating a challenging fourth quarter of 2025, prompting many investors to reconsider their positions. A particularly vulnerable group is short-term holders (STHs), who have faced sustained pressure. Recent on-chain analysis reveals a concerning trend: the STH MVRV (Market Value to Realized Value) has remained deeply in the red for a consecutive 60 days, signaling potential further losses and raising questions about market stability. This article delves into the implications of this metric, its correlation with technical analysis, and what it could mean for Bitcoin’s future price trajectory.

Understanding the STH MVRV Metric

The STH MVRV is a crucial indicator in the cryptocurrency space. It compares Bitcoin’s current market value to its realized value – the average price at which all BTC were last transacted. Essentially, it tells us whether short-term Bitcoin investors are, on average, holding a profit or a loss. A value below 1 suggests that STHs are collectively underwater, while a value above 1 indicates they are in profit.

Why is a Low STH MVRV Significant?

Prolonged periods with an STH MVRV below 1 often precede or coincide with market capitulation events. When short-term holders are consistently facing losses, they are more likely to sell their holdings, potentially exacerbating downward price pressure. The current 60-day stretch in the red represents a significant “patience test” for these investors, according to market quant Burak Kesmeci. This extended period of negative MVRV readings highlights heightened market stress and increases the risk of capitulation-driven sell-offs.

60 Days in the Red: A Deep Dive into the Data

As highlighted by Burak Kesmeci on X (formerly Twitter), the current STH MVRV reading is the lowest observed throughout 2025. This prolonged negative territory suggests that short-term holders are experiencing substantial unrealized losses. While a negative MVRV doesn't automatically guarantee further price declines, it does indicate a higher probability of such an outcome, especially if bearish sentiment persists. However, it's also important to note that extended negative readings can sometimes signal an approaching market bottom, as remaining holders demonstrate resilience.

Key Takeaway: The 60-day negative STH MVRV is a warning sign for Bitcoin investors, suggesting increased risk of further downside.

Technical Analysis Reinforces the Bearish Narrative

Adding weight to the on-chain analysis, Kesmeci also pointed out that Bitcoin has been trading below its 111-day simple moving average (SMA 111) for the same period. The SMA 111 is a widely used technical indicator that represents the average price of Bitcoin over the past 111 days. When the price falls below this average, it's often interpreted as a bearish signal.

The Convergence of On-Chain and Technical Indicators

The simultaneous occurrence of a deeply negative STH MVRV and Bitcoin trading below the SMA 111 reinforces a consistent narrative: Bitcoin is currently in a consolidatory or corrective phase, rather than the beginning of a significant upward trend. This convergence of indicators suggests that the market is likely to remain volatile in the near term.

Bitcoin Price Action and Future Outlook

As of today, Bitcoin is trading around $87,380, showing minimal movement in the past 24 hours. However, this relative stability doesn't negate the underlying bearish signals from the STH MVRV and technical analysis. The future trajectory of Bitcoin remains uncertain and will likely be influenced by a combination of factors.

• Macroeconomic Events: Global economic conditions, inflation rates, and interest rate policies can significantly impact investor sentiment towards risk assets like Bitcoin.
• Spot Demand: Renewed interest from institutional investors and retail traders could provide a much-needed boost to Bitcoin’s price.
• Regulatory Developments: Changes in regulations surrounding cryptocurrencies could either hinder or accelerate adoption.

These factors will ultimately determine whether BTC continues to decline or begins a recovery. Investors should carefully monitor these developments and adjust their strategies accordingly.

What Does This Mean for Bitcoin Holders?

The current market conditions present a challenging environment for Bitcoin holders, particularly short-term investors. Those holding BTC for less than a year are currently facing significant unrealized losses. Here are some considerations for navigating this period:

• Long-Term Perspective: If you believe in the long-term potential of Bitcoin, consider holding through the volatility.
• Risk Management: Implement robust risk management strategies, such as setting stop-loss orders, to protect your capital.
• Diversification: Don't put all your eggs in one basket. Diversify your portfolio across different asset classes.
• Stay Informed: Continuously monitor market developments and adjust your strategy as needed.

Conclusion: Navigating a Bearish Landscape

The deeply negative STH MVRV, coupled with Bitcoin trading below the SMA 111, paints a concerning picture for short-term holders. While a market bottom is possible, investors should be prepared for potential further losses. A cautious approach, coupled with a long-term perspective and sound risk management, is crucial for navigating this challenging landscape. The coming weeks and months will be critical in determining Bitcoin’s future direction, and staying informed will be paramount for all participants in the cryptocurrency market.

Disclaimer: This article is for informational purposes only and should not be considered financial advice. Always conduct your own research before making any investment decisions.

Featured image from iStock, chart from TradingView