Bitcoin Enters Loss-Dominant Phase: Short-Term Holder SOPR Weakens

Bitcoin is attempting to hold above the $90,000 level as the market enters a new and increasingly decisive phase. After weeks of tight consolidation, BTC appears to be coiling for a volatile move, with price action compressing while conviction remains fragile on both sides of the market. This prolonged range has tested investor patience, but historically, such conditions often precede sharp expansions in volatility.

According to data shared by Axel Adler Jr., short-term holder behavior continues to reflect elevated stress beneath the surface. Since October 13, 2025, short-term holders have consistently been selling Bitcoin at a loss. The weekly average SOPR (Spent Output Profit Ratio) has remained firmly below the neutral 1.0 level, confirming that a large share of recent transactions are being realized at negative margins.

Compounding this signal, the SOPR Z-Score has remained negative, reinforcing the idea that loss-taking is not isolated or episodic, but rather persistent. This combination points to active distribution from short-term participants, even as Bitcoin trades well above long-term structural support zones.

This dynamic highlights a growing divergence within the market. While long-term structure remains intact, short-term participants are increasingly capitulating into weakness. As Bitcoin continues to defend the $90K region, the next directional move is likely to be shaped by whether this selling pressure exhausts—or accelerates into a deeper correction.

Short-Term Holders Capitulate as Loss-Dominant Regime Persists

The latest on-chain update from Adler focuses on the behavior of short-term holders through the STH SOPR metric, which measures the ratio between the selling price and the acquisition price of coins that last moved within the past 155 days. When this indicator trades below 1.0, it means that short-term participants are, on average, realizing losses rather than profits.

As of January 11, the STH SOPR (7-day simple moving average) stands at 0.994, while the daily reading dropped to 0.9817, marking its lowest level since the start of the year. This is not an isolated data point. On January 8, the 7-day SOPR average crossed below the 30-day average, falling from 0.9996 to 0.9928. This crossover provides technical confirmation of a regime shift toward a loss-dominant environment.

Further reinforcing this signal, the SOPR Z-Score currently sits at -0.58. This indicates that SOPR values are trading roughly half a standard deviation below their annual mean, a zone that has historically coincided with local price bottoms rather than trend exhaustion.

Sustained SOPR readings below 1.0 increase psychological and financial pressure on short-term investors, often forcing capitulation. A meaningful regime change would require the 7-day SOPR to reclaim levels above 1.0, supported by a Z-Score turning positive and signaling renewed profitability for short-term holders.

Bitcoin Consolidates as the Market Searches for Direction

Bitcoin’s weekly chart shows a market locked in consolidation after a sharp correction from the October highs, with price currently hovering just above the $90,000 level. This zone has become a key pivot, acting as short-term support after BTC failed to hold above the $95,000–$100,000 region. The recent candles reflect indecision rather than strong directional conviction, consistent with a broader pause in momentum.

From a trend perspective, Bitcoin remains above its long-term moving averages, with the 200-week MA still rising well below the current price. This confirms that, structurally, the broader uptrend has not been invalidated. However, the shorter-term moving averages have flattened, and price is trading below the faster weekly MA, highlighting a loss of upside momentum since late 2025.

The consolidation structure resembles a range-bound base, where volatility has compressed following the aggressive sell-off. Volume has declined compared to the distribution phase near the highs, suggesting that forced selling pressure has eased, but new demand has yet to step in decisively. This aligns with on-chain data showing weak participation from marginal buyers.

As long as BTC holds above the $88,000–$90,000 support band, the market appears to be digesting gains rather than entering a full trend reversal. A sustained reclaim of the $95,000 area would signal renewed strength, while a breakdown below current support could open the door to a deeper corrective leg.

Featured image from ChatGPT, chart from TradingView.com