Short-Term Bitcoin Holders Capitulate as BTC Tests $80K: Is a Cycle Bottom Forming?

Bitcoin is once again testing the $80,000 support zone after suffering a 36 percent decline from its October peak. The pullback, the deepest in months, has pushed short-term holders into widespread capitulation, a behavior often observed near market bottoms during past cycles.

According to on-chain analysis shared by Crypto Dan, investors holding Bitcoin for fewer than 155 days have flipped decisively bearish. This group tends to react emotionally to price pressure, and their capitulation has historically aligned with local lows during broader uptrends. He noted that if the current environment is simply a correction within the larger bull cycle, this zone may represent a bottom. If instead the market has entered a longer bearish phase, the decline could extend significantly.

Additional data from CryptoOnchain shows that long-term holders have begun distributing Bitcoin aggressively, transferring roughly 63,000 BTC from old wallets. This form of distribution typically appears near market tops or during periods of weakening macro demand. Short-term holders have been absorbing much of this supply at prices near $87,000, creating a fragile equilibrium between selling pressure and new demand.

Another bearish signal emerged when the Binary Coin Days Destroyed metric crossed a key threshold on November 23. This indicator reflects the movement of older coins and often accompanies sell-offs when it spikes sharply. Previous signals in this cycle have each preceded downward price action, suggesting the market may still be vulnerable.

These developments come amid fading institutional appetite. Spot Bitcoin ETF inflows have slowed to some of their weakest levels since launch, while major corporate buyers have reduced acquisitions dramatically. This loss of demand has made it harder for the market to absorb long-term holder distribution.

Bitcoin has since staged a partial recovery toward $87,000 after briefly dipping near $82,000, but it remains down sharply over the past month. The loss of the $90,000 support level has shifted attention to the next major demand region between $70,000 and $73,000, a zone aligned with the average cost basis of large holders.

Even prominent investors are adjusting to the new environment. Robert Kiyosaki disclosed that he sold over $2 million worth of Bitcoin around $90,000, though he emphasized plans to reinvest and remains optimistic about long-term prospects.

With both bearish and stabilizing signals emerging, Bitcoin sits at a pivotal crossroads. Whether the recent capitulation marks a cycle bottom—or the market is preparing for another leg lower—depends on whether fresh demand re-enters the market in the days ahead.