Main Points :
- Traditionally, surges in short-term holder (STH) accumulation have corresponded to local tops in Bitcoin’s price cycles.
- In 2025, STHs hold ~18 % of circulating supply—lower than past peaks of 20–22 %.
- Since July, STHs added ~450,000 BTC, reaching ~2.6 million BTC in total (per the original article).
- Meanwhile, long-term holders (LTHs) have slightly reduced their positions, selling ~250,000 BTC since summer, now holding ~14.5 million BTC.
- Recent data shows STH supply increased by 559,000 BTC in a few months, indicating fresh demand entering the market.
- Profit-taking by STHs remains modest (2 % levels), much lower than typical cycle-top behavior (~8 %), suggesting restraint.
- However, short-term whales hold ~$10.1 billion in paper gains, and ~$5.7 billion in BTC has moved from STH wallets to exchanges, signaling rising risk.
- 71 % of Bitcoin supply is currently classified as “illiquid,” meaning it is held by investors unlikely to transact imminently.
- Key cost-basis levels such as ~$97.6 k (STH cost basis support) and resistance zones around $115k are being watched for continuation or reversal.
- Institutional demand and ETF inflows remain strong, with a record $5.95 billion flowing into crypto ETFs in early October 2025.
- Overall, the established “STH surge = local top” pattern may be weakening as market structure and participation evolve.
Introduction: The Conventional Narrative and Why It Matters
In the crypto-asset world, market participants often look at on-chain metrics as leading indicators. Among these, short-term holders (STHs)—those investors who acquired Bitcoin within the past ~155 days—are considered “weak hands” who are more likely to sell in response to volatility. Historically, when STHs accumulate aggressively, it often precedes a local peak in Bitcoin price, as speculative capital rushes in and then exits in profit.
The article by James Van Straten argues that this time, the pattern might be different. Despite STH accumulation, several structural shifts and behavioral changes suggest that we might no longer see the sharp reversals that marked past cycles. For those exploring new crypto opportunities or thinking about practical blockchain deployment, this evolving behavior hints at a maturing market environment.
Below, I provide a narrative, updated with recent data and trends, to re-interpret this dynamic and to reflect on what it means going forward.
The Traditional STH Accumulation → Local Top Pattern
Historically, Bitcoin bull cycles have seen waves of speculative demand from newer participants. During such phases, STH accumulation increases sharply, sometimes pushing their share of circulating supply to 20–22 %. After the market overheats, many of these STHs exit, triggering sharp local highs or corrections.
Van Straten’s article points out that in 2025, the STH share has peaked at about 18 %, lower than prior cycles (typically 20–22 %). Short-term holders have grown their holdings since July, adding approximately 450,000 BTC, bringing their total to ~2.6 million BTC. Yet, this accumulation is happening under a more restrained regime than in prior cycles.
Concurrently, long-term holders—those holding for more than ~155 days—have shown partial profit-taking, releasing ~250,000 BTC since summer and now holding around 14.5 million BTC. Van Straten cites these shifts as evidence that the market’s speculative axis is gradually cooling.
New Flows and Fresh Demand: STH Supply Surges
Recent data supports and expands on Van Straten’s observations. Over the past three months, STH supply has increased by 559,000 BTC, reflecting significant fresh inflows. This upward inflow suggests that new buyers are entering the market rather than trading existing coins.
Yet, interestingly, profit-taking remains unusually muted. Activity shows that STHs have realized gains at margins of only ~2 %, far below the ~8 % levels typically seen near cycle tops. The cautious behavior implies that STHs are not acting with the frenetic exit sentiment of past cycles.
At the same time, large short-term whales hold paper gains of about $10.1 billion, and recent exchange inflows from STH wallets totaled ~$5.7 billion, indicating potential readiness to liquidate. The tension between accumulation and latent selling pressure creates a delicate balance in the current market.
The Growing Share of Illiquid Supply
One of the structural changes reshaping Bitcoin’s behavior is the rising proportion of supply held in “illiquid” status. According to Glassnode, 71 % of Bitcoin’s circulating supply is currently classified as illiquid, meaning holders are unlikely to transact in the near term.
This is a key shift: as more supply becomes dormant or locked, the effective liquid float shrinks, making price moves more sensitive to committed flows. The dominance of illiquid holdings suggests the market is becoming less volatile under speculative impulse and more driven by long-term conviction and capital rotation (e.g. via ETFs).
Critical Cost-Basis Levels and Market Structure
To assess whether accumulation by STHs is bullish or precarious, we must monitor key cost-basis levels and resistance zones.
- The $97.6 k STH cost-basis support is viewed as a pivotal floor for local bullish momentum; if breached, it would shake confidence.
- On the upside, $115k–$115.4k is emerging as the first significant resistance zone in a price-discovery scenario.
- Recent pullbacks have tended to find support in clusters between $93k–$110k. A breakdown below $107k–$108.9k might open deeper downside toward $93k–$95k.
These zones are critical in interpreting whether the market is consolidating, breaking upward, or risking structural reversal.
Institutional and ETF Flows: Reinforcing the Trend
One of the defining differences from past cycles is the strength of institutional participation. Global crypto ETFs drew record $5.95 billion in inflows during the week ending October 4, 2025, with Bitcoin alone attracting ~$3.55 billion.
These institutional inflows help buffer speculative swings — they bring committed capital that doesn’t respond to short-term noise. This shift matters: the STH patterns now play out in a more layered market, where retail impulses coexist with deep-pocketed institutional flows.
Is the “STH Surge = Local Top” Rule Breaking?
Given all the above, the central question is whether we are witnessing a structural decoupling from the old pattern — where a surge in STH accumulation marks a local top. Several observations suggest that might be the case:
- Lower STH share peaks: The current ~18 % share is lower than prior cycles’ 20–22 %.
- Modest profit-taking: STHs are not liquidating in force even during price run-ups.
- Higher illiquid supply: A large portion of supply is locked away from speculative flows.
- Strong institutional support: ETF inflows bring countervailing strength.
- Fresh demand entering: New BTC accumulation by STHs suggests continued appetite, not just reactivation of old coins.
These changes indicate that STH accumulation should not be automatically interpreted as a signal of an imminent top. Instead, we may see a more gradual rotation between buyer cohorts.
However, this doesn’t mean risk is gone. The presence of whales holding massive unrealized gains, and exchange flows from STHs, means the potential for sudden distribution still exists. The pattern may be muted or delayed rather than eliminated.
What This Means for Crypto Hunters and Blockchain Practitioners
For readers hunting new crypto opportunities or thinking about deploying blockchain-based business models, several takeaways emerge:
- Don’t rely blindly on historical heuristics: The STH-peak indicator is under transformation. Use multiple metrics (cost basis, exchange flows, ETF trends) together.
- Watch inflection zones: $97k, $108–110k, $115k are structural pivot regions.
- Follow institutional flows: ETF and large capital movement trends will carry increasing weight relative to retail patterns.
- Liquidity constraints matter more: With 71 % of supply illiquid, price moves may amplify on committed flows.
- Behavioral shifts are leading: The reticence of STHs, their low profit-taking, and fresh buyers entering are signs of evolving market psychology.
Conclusion: A Mature Market in Transition
The conventional pattern — “STH accumulation peaks, then local top” — is under stress. In 2025, Bitcoin’s landscape has shifted: STHs accumulate modestly but don’t capitulate, illiquid supply dominates, and institutional capital plays a more central role.
We may be entering an era where short-term speculative metrics are still useful, but no longer definitive on their own. Instead, market narratives will pivot around capital crystallization, capital rotation (not just buy-sell), and structural support from institutional flows.
As we watch Bitcoin continue its ascent (or potential rotation), the story will be less dramatic peaks and crashes, and more measured transitions. The rulebook of previous cycles is being edited — for those exploring new cryptos or blockchain ventures, adapting to this evolving market is key.
