Since the short squeeze in mid-December, Bitcoin has failed to post any major gains, repeatedly facing rejection around the $90,000 level. The cryptocurrency is currently consolidating near $87,000 as investors wait for a clearer market direction.
According to pseudonymous analyst Sunny Mom, recent on-chain data indicates bearish sentiment is likely to persist in the coming months, following the extended correction that began in October and November.
Why Rising Short-Term Bitcoin Supply Is Signaling a Rare Bearish Trend
In a QuickTake post on December 27, Sunny Mom highlighted the BTC HODL waves metric, which shows a growing share of short-term holders alongside falling prices—a pattern that typically flips a bullish indicator into a bearish one.
Historically, an increase in short-term holder (STH) supply—coins held for less than 155 days—suggests new capital is entering the market ahead of a sustained rally. However, the analyst describes the current trend as “passive bag-holding” rather than “new blood.” This is because many investors who bought during the FOMO-driven rally to $120,000 in October, along with dip buyers in November, are now sitting on unrealized losses. This creates a price dynamic that changes market behavior.
Sunny Mom explains that each relief rally now faces selling pressure as these holders try to exit at breakeven, effectively turning the growing STH group into a price ceiling rather than a floor. As a result, price rebounds struggle to sustain momentum.
The analyst notes that the emotional strain on the market is becoming visible on-chain. There have been repeated spikes in Net Realized Loss (NRL) since the October liquidations, suggesting capitulation is underway as investors finally lock in losses after months of holding on. Sunny Mom compares this process to a “dull knife” finally cutting deep, indicating weaker hands are being forced out not by a sudden crash, but through prolonged exhaustion.
Bitcoin Faces a Demand Vacuum as a Drop Below $80,000 Remains Likely
In further analysis, Mom attributes the current bearish setup to a demand vacuum. Exchange reserves are near multi-year lows, indicating limited immediate sell-side liquidity. At the same time, long-term holders (LTHs) show little interest in selling, suggesting conviction capital remains strong.
The issue, therefore, lies on the demand side. With macroeconomic uncertainty still high, new buyers appear hesitant to enter, creating a vacuum in demand. This also leads to thin order books, meaning even modest selling pressure can cause sharp price declines.
While some market observers anticipate a potential recovery in Q1 2026—pointing to expected rate cuts and improved global liquidity—Mom predicts Bitcoin may need a “final shakeout” to resolve the imbalance and reset the market for a bullish breakout. The analyst suggests a drop below $80,000 could act as a liquidity hunt, flushing out remaining weak hands and allowing larger holders to reaccumulate.
Frequently Asked Questions
FAQs Bitcoins Unusual ShortTerm Supply Surge Potential Downturn
Beginner Questions
What does shortterm supply surge mean for Bitcoin
It refers to a noticeable increase in the amount of Bitcoin that has recently been moved to exchanges or is being held by wallets that typically sell quickly This suggests more people might be preparing to sell
Why would more Bitcoin being available to sell be a bad sign
In simple terms if the supply of sellers increases faster than the demand from buyers the price typically goes down A surge in available supply can signal that a price drop might be coming
How do we know theres a surge in shortterm supply
Analysts track blockchain data specifically looking at the movement of coins from longterm storage wallets to exchange wallets and the age of coins being sold A spike in these metrics indicates the surge
Does this definitely mean the price will crash
No its a signal or a warning sign not a guarantee It suggests increased selling pressure but other factors like major news institutional buying or regulations can change the outcome
Whats the difference between shortterm and longterm holders
Shortterm holders typically bought their Bitcoin within the last 155 days and are more likely to sell on price swings Longterm holders have held for longer and are generally less reactive to shortterm volatility
Intermediate Advanced Questions
What onchain metrics specifically indicate this surge
Key metrics include
Exchange Inflow Spike A sharp rise in BTC being deposited to exchanges
STH Supply Increase The total amount of coins held in wallets classified as STHs grows significantly
Spent Output Age Bands Shows a large volume of coins that are 13 months old being spent indicating recent buyers are becoming active
Could this be a distribution phase by whales
Yes thats a common interpretation A supply surge can indicate that large holders or early investors are moving coins to exchanges to distribute them to the market often near perceived price tops
How does this relate to the Realized Price for shortterm holders
The STH Realized Price is the average cost basis for recent