Short-Term Bitcoin Holders Remain Underwater as MVRV Signals 22% Loss

Bitcoin shows a slow reset as STH losses persist, leverage declines, and ETF demand softens without panic selling.

Bitcoin’s short-term holders are still under pressure as on-chain data shows their positions remain deep in the red. Recent buyers have held coins above current market value for about 5 months, a sign that recovery has yet to take hold.

While past bull cycles often turned such periods into buying zones, current conditions look more mixed. Lower leverage, softer ETF demand, and steady loss-taking point to a slower reset rather than a fast rebound.

Prolonged Drawdown Leaves Bitcoin Short-Term Holders Deep in the Red

Short-term Bitcoin holders, often seen as the market’s more reactive group, are facing continued strain. Their realized price sits near $87,000, while spot Bitcoin remains well below that level. That gap means many recent buyers still hold coins at a higher average cost basis than today’s market price.

As spotted by market analysts Darkfost, on-chain data reinforces that pressure. The short-term MVRV ratio stands at 0.78, implying an average unrealized loss of about 22%. In simple terms, coins held by recent entrants are valued well below their purchase price.

Past bull markets have often treated sub-1 MVRV readings as useful entry zones. Such readings can appear during healthy corrections before price resumes its broader uptrend. Yet the length of the current drawdown adds caution. Five months of losses for short-term holders is not a trivial stretch, and it raises questions about market strength.

Spot Demand Takes Center Stage After Massive BTC Leverage Unwind

Derivatives data offers a clearer view of what changed during the decline. Open interest across exchanges has dropped sharply from nearly $45 billion at cycle highs to around $21 billion. That decline points to a major flush of speculative positioning after Bitcoin’s rally above $100,000.

Image Source: CryptoQuant

As a result, current weakness appears less tied to excess leverage than earlier pullbacks. Liquidation risk has eased as crowded futures trades have been cleared out. Recovery from here may depend far more on real spot demand than on fast money chasing momentum.

After months of strong accumulation, spot Bitcoin ETFs recently posted sustained outflows during the correction. More recently, flows have stabilized, with modest weekly inflows such as roughly $167 million.

That pattern suggests cooling demand rather than broad institutional flight. Assets held in ETFs have fallen from peak levels, signaling lower participation by large investors. Even so, current flow data does not point to aggressive distribution. Big players appear to be stepping back rather than rushing for the exit.

MVRV Recovery Above 1 Seen as Key Trigger for Bitcoin Momentum Shift

Realized losses have increased through 2025 and into 2026, but they remain far below the extreme spikes seen during the 2020 COVID crash and the 2022 Luna and FTX collapse. Selling pressure is present, though it has arrived in waves rather than in a sudden panic.

Such behavior fits closely with the weak short-term holder MVRV reading. Investors are accepting losses, but they are doing so gradually. That creates a picture of controlled capitulation rather than forced selling.

Image Source: NewHedge

Reclaiming the $87,000 short-term holder realized price would return that group to profitability and strengthen the case for trend continuation. A move in MVRV back above 1 would also mark a return to net unrealized profit. 

Stronger ETF inflows could confirm renewed institutional interest, while a sharp spike in realized losses may signal a more decisive final washout.

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