Bitcoin's market is flashing conflicting signals as short-term holders moved 107,760 BTC within the 1-to-3-month age band in a single day—the largest such movement in over seven months, according to CryptoQuant analyst RugaResearch. The transfer, flagged on May 30, suggests that reactive investors are capitulating amid recent price weakness. Bitcoin has dropped 9% since its May 6 peak near $82,000, and historical data indicates it has never posted three consecutive months of gains in a bear-market year, with May likely closing in the red.
Yet simultaneously, the number of long-term holders (addresses holding BTC for over 155 days) has climbed to a record 15.8 million, per XWIN Research Japan. This surge typically signals strong conviction, as these investors hold in expectation of future appreciation. However, XWIN notes that in this context, the rise may actually point to a demand shortage—fewer new buyers entering the market to absorb supply, leaving the price vulnerable despite diamond-hand behavior.
The divergence is stark: about 40% of Bitcoin addresses are now underwater, with realized losses mounting as the price oscillates near $74,000. This level of underwater supply recalls conditions seen in the 2022 bear market, raising fears of a deeper correction. Short-term holders exiting at a loss amplify selling pressure, even as long-term investors accumulate.
From a market-cap perspective, Bitcoin's dominance has remained elevated near 52% as altcoins underperform, but total crypto market cap has slipped below $2.4 trillion. Correlation with macro assets like equities remains high, with U.S. rate uncertainty and regulatory overhang weighing on sentiment. The SEC's ongoing enforcement actions against major exchanges continue to dampen speculative appetite, though no new crypto-specific rules have been finalized.
Author Robert Kiyosaki, in remarks following the correction, urged investors to prioritize financial education over hype, dismissing the downturn as a buying opportunity for those with conviction. Still, the record LTH count may reflect a market top rather than a bottom—historically, extreme holder conviction has preceded prolonged drawdowns when accompanied by declining liquidity and widening loss ratios.