Yeliz Akmaca 
The supply of Bitcoin held at a loss by short-term investors has reached its highest level since the FTX collapse, as of December 2025. On-chain data shows that nearly all recent market entrants are now underwater. With Bitcoin still trading below the 104,000 short-term cost basis, internal market divergences are becoming increasingly visible.
Short-Term Bitcoin Holders Are Almost Entirely Underwater
According to Glassnode, short-term holders are defined as addresses holding Bitcoin for less than 155 days. Based on this definition, most coins acquired after June 15—when Bitcoin was trading near 104,000 dollars—are now priced above the current spot level.
As of December 2025, approximately 2.8 million BTC held by short-term investors is sitting at a loss. This marks the largest short-term loss supply recorded since the FTX collapse in November 2022, when Bitcoin was trading near 15,000 dollars.
Throughout most of 2025, short-term Bitcoin investors remained largely profitable. On-chain data shows that roughly two-thirds of trading days during the year saw short-term holders in profit.
That trend, however, reversed sharply in the final quarter. Rising price volatility pushed unrealized losses among short-term positions to nearly 12 percent, rapidly shifting previously profitable investors into negative territory.
Price Correction Remains Within Bull Market Norms
Bitcoin has declined roughly 25 percent from its all-time high reached in October. Historically, this magnitude aligns with typical bull market corrections, which tend to range between 20 and 30 percent.
Despite this, the impact has been disproportionately felt by short-term holders. Nearly all recent purchases have slipped into loss, highlighting the heightened liquidity sensitivity of short-term positioning.
Long-Term Holders Move Into Distribution
In contrast to short-term holders, long-term investors continued a gradual distribution trend throughout 2025. Glassnode data shows long-term holder supply falling from 14,755,530 BTC in July to 14,302,998 BTC by mid-November, a reduction of approximately 452,532 BTC.
Bitcoin OG and Fragrant Board Director Nicholas Gregory commented on the trend:
“Many long-term holders chose to sell in 2025 after years of accumulation. These decisions were driven more by lifestyle and liquidity considerations than by negative views on Bitcoin.”
According to Gregory, the launch of US spot Bitcoin ETFs and sustained prices above 100,000 dollars created an attractive and highly liquid exit window for long-term investors.
US Spot Bitcoin ETFs Show Notable Divergence
Despite the price pullback, US-listed spot Bitcoin ETFs remained relatively resilient. When measured in BTC terms, total assets under management declined modestly from a peak of 1.38 million BTC on October 10 to approximately 1.33 million BTC, a drop of just 3.6 percent.
Checkonchain data indicates that measuring ETF AUM in BTC terms helps filter out price volatility effects. This divergence suggests that the recent decline was driven more by spot market behavior among holders than by sustained ETF outflows.
What Market Behavior Is Signaling
Current conditions show short-term investor sentiment under significant pressure, while long-term capital continues to operate with a more structured, time-based strategy.
The concentration of short-term losses indicates that market stress has yet to fully unwind. As a result, Bitcoin may continue to experience elevated volatility in the near term.
When viewed together, these signals suggest the recent price action extends beyond a temporary fluctuation. The shift of short-term holders into loss reflects a clear deterioration in short-term market sentiment.
In summary, the current landscape reflects more than simple price movement. It offers critical on-chain signals for investors monitoring potential directional shifts.
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