- The realized profit loss ratio for short-term holders has sharply fallen to -1.4 mirroring April 2025 correction levels.
- Short-term holders are under intense pressure as BTC stagnates near $113000 triggering widespread realized losses.
- Analysts say such phases often precede bottom formation as weaker holders exit and volatility spikes short term.
Bitcoin’s short-term holder (STH) realized profit and loss ratio has plunged to -1.4, marking its sharpest decline in months. The data from Checkonchain reveals that the drop mirrors the April 2025 correction phase when traders faced similar conditions. Analysts describe this event as part of a “final correction phase” often seen before market stabilization.
The realized price for short-term holders remains near $113,000. However, the lack of upward momentum has pressured investors who bought at higher levels. As prices consolidate, the realized losses have widened, forcing weaker participants to capitulate. This capitulation effect typically occurs when the market enters extended consolidation after strong rallies.
The realized P/L ratio shows red readings dominating the chart, reflecting the losses realized on-chain. According to analysts, this indicates that selling pressure has intensified while profit-taking has slowed significantly.
Could this point mark the beginning of a new accumulation phase for long-term investors?
Ratio Mirrors Past Correction Levels
The decline in the STH realized ratio to -1.4 mirrors the same reading observed during the April 2025 market correction. That period also followed months of price stagnation before a rebound took place. Historical data often associates negative realized ratios with cycle resets where selling exhaustion precedes recovery.
Bitcoin’s price structure shows resilience despite short-term volatility spikes. The realized loss indicator suggests short-term holders are offloading at a loss, clearing market inefficiencies. Data implies that long-term holders remain unfazed, maintaining control over the circulating supply while short-term traders bear the volatility.
On-chain analysts interpret this pattern as a healthy phase in broader market cycles. When short-term metrics show extreme red zones, markets typically consolidate before resuming trend alignment. This consistency has repeated across previous cycles, reinforcing confidence in the current setup.
Market Dynamics Signal Final Correction Phase
The realized P/L ratio functions as a behavioral metric highlighting investor sentiment and reaction to price shifts. At -1.4, the data implies the weakest hands are exiting positions. Historically, these conditions have marked periods of market cleansing that often lead to recovery waves.
BTC’s stagnation has created a buildup of unrealized losses among short-term participants. This structural pressure leads to forced selling until stronger hands reaccumulate supply. Analysts compare it to the “shakeout” stage seen during previous halving cycles where the market transitions from distribution to consolidation.
As selling pressure peaks, the probability of a bottom formation rises. Analysts note that once realized losses stabilize, Bitcoin’s price typically enters a relief phase. In such environments, long-term metrics such as net unrealized profit/loss (NUPL) and MVRV often begin recovering first, signaling renewed confidence.
Volatility Spikes Mark Market Transition
Short-term realized losses frequently trigger brief volatility spikes. These are often viewed as catalysts for liquidity redistribution within exchanges. As weak holders exit, markets absorb sell orders, setting up potential rebounds.
Current on-chain readings show this pattern emerging again. The dominance of red on the profit/loss chart implies stress conditions, yet overall trend indicators remain positive. If history repeats, BTC may soon enter a transitional phase of recovery driven by patient investors.
Analysts emphasize that while short-term pain dominates sentiment, the structural integrity of Bitcoin’s market cycle remains intact. Each phase of realized loss has historically paved the way for stronger upward trends, confirming that capitulation serves as a natural part of price normalization.
