Bitcoin Indicator Signals Short-Term Holders Have Been Taking Profits – Is The Next Rally Near?

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Bitcoin is trading below the $100K mark after enduring a volatile and turbulent week. The cryptocurrency faced extreme selling pressure last Sunday, dropping over 9% in less than 24 hours. Although Bitcoin managed a slight recovery on Monday, the selling pressure has persisted, leaving the market in a state of uncertainty.

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Key metrics shared by Axel Adler on X shed light on the current state of Bitcoin’s price action. According to Adler, the Bitcoin Short-Term Holder (STH) MVRV indicator has declined from $98K and a value of 1.35 to average levels. This drop suggests that short-term holders have been actively taking profits during this period of heightened volatility.

The STH MVRV is a critical indicator for assessing market sentiment among short-term participants. Historically, values above 1.30–1.35 signal an overheated market, often leading to sell-offs. The recent decline in the indicator indicates that some short-term holders have exited their positions, potentially marking the end of a local overheated phase.

As Bitcoin consolidates below $100K, market participants are keeping a close eye on key support and resistance levels, hoping to identify the next big move in this unpredictable market environment. For now, profit-taking and volatility dominate the narrative.

Bitcoin Faces Persistent Selling Pressure As Short-Term Holders Exit Positions

Bitcoin has been grappling with heightened volatility and selling pressure since the start of February, a trend that has negatively impacted altcoins and meme coins, leading to bearish price action across the market. Analysts are increasingly calling for a correction as bulls show signs of fatigue and price movements suggest further declines could be on the horizon.

Key insights from CryptoQuant, shared by Axel Adler on X, reveal an important shift in market dynamics. The Bitcoin Short-Term Holder (STH) MVRV indicator, a critical tool for gauging short-term holder behavior, has declined from $98K and 1.35 to average levels. This drop indicates that short-term holders have been taking profits amid the recent market volatility.

Bitcoin Short-Term Holder MVRV | Source: Axel Adler on XHistorically, an STH MVRV above 1.30–1.35 signals an overheated market, often preceding significant sell-offs. The current decline in the indicator suggests that a portion of short-term holders have exited their positions, relieving some pressure on the market. A return to average levels typically marks the end of a local overheated phase.

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If demand remains strong, Bitcoin is likely to enter a consolidation or sideways trading phase following this period of profit-taking. However, a drop in the STH MVRV below 1.0 would signal the formation of a local bottom, potentially setting the stage for a future rally. As the market navigates this period of uncertainty, monitoring these key metrics will be crucial in anticipating Bitcoin’s next move.

Price Struggles to Find Direction Below $100K

Bitcoin is trading at $96,700 after several days of sideways movement within a tight range between $100,000 and $95,600. The price has been unable to establish a clear direction, with bulls losing control after failing to hold the $100K mark last Tuesday. This lack of momentum has created an atmosphere of uncertainty in the market, leaving traders on edge as Bitcoin hovers near key support levels.

BTC trading sideways | Source: BTCUSDT chart on TradingViewThe short-term outlook for Bitcoin remains unclear, as neither bulls nor bears have managed to take decisive control. If Bitcoin fails to hold above the critical $95K support level, a deeper decline into the $90K demand zone could follow. Such a move would signal increased selling pressure, potentially dampening sentiment further and extending the current consolidation phase.

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On the other hand, reclaiming the $100K level is crucial for bulls to regain control and push the price higher. However, without a strong push above this psychological resistance, Bitcoin’s price action is likely to remain choppy and uncertain. Market participants are watching closely for any signs of a breakout or breakdown, as the next move could define Bitcoin’s trajectory in the coming weeks. For now, caution remains the prevailing sentiment.

Featured image from Dall-E, chart from TradingView