Is this the bottom of the cycle? Short-term holders capitulated when BTC reached $80,000

On-chain data shows that Bitcoin holders have capitulated in the short term, a pattern seen near previous local bottoms.

Bitcoin (BTC) is testing the $80,000 support level, a price level not seen in six months, after a steep 36% decline from its all-time high in October.

This downturn has led to a massive wave of capitulation among short-term investors, a possible sign that a local bottom is forming even as long-term holders begin to distribute their BTC at a historic pace.

Market sentiment and signals on the chain point to a crossroads

The mood on social media and on-chain data platforms is one of increased caution. According to an analysis by Crypto Dan, investors who have held Bitcoin for less than 155 days have officially done so capitulated.

Often driven by emotions, this group has seen sentiment swing from positive to negative, with the market observer noting that similar behavior was observed at the lows of previous corrections within this bull cycle, indicating that a potential recovery is likely. However, he warned that if Bitcoin fails to hold the $80,000 level, the market could be in for a much tougher period.

“If the current zone is a correction phase → this is the bottom,” he wrote, adding: “If the current zone is a bear cycle → the end of the decline is still far away”

Complementing the story, data shared by another analyst, CryptoOnchain, revealed a historic transfer of wealth. Their stats show a massive outflow of 63,000 BTC from long-term wallets, a classic sign of distribution near market tops.

At the same time, short-term holders are accumulating that supply and buying the dip at prices around $87,000. This dynamic creates a fragile equilibrium that, if new demand cannot absorb this selling pressure, could lead to a deeper correction.

There were more bearish signals from GugaOnChain, which highlighted that a key on-chain metric, the Binary Coin Days Destroyed (CDD), activated a sell signal on November 23.

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According to them, this has happened four times before in this cycle, and each time there has been a price correction. The current signal, with a CDD value of over 25 million, indicates a significant reactivation of the old BTC, usually for the purpose of selling.

A broader view of the demand and price trajectory

The sell-off highlighted by CryptoDan comes against the backdrop of declining institutional demand. As previously reported by CryptoQuant, spot Bitcoin ETF position growth has slowed to one of the weakest rates since launch.

Furthermore, publicly traded companies that were once big buyers have seen their purchasing power evaporate, with Strategy reducing its annual acquisitions from 171,000 BTC to just 9,600 BTC.

Meanwhile, in the market, the flagship cryptocurrency managed to stage a recovery to the current level of around $87,000 after hitting a low of almost $82,000 in the past week. Still, rates remain down about 22% over the past thirty days, and nearly 12% year over year.

The breach of the $90,000 support level, a key psychological barrier, has now shifted analysts’ focus to the next major support zone between $70,000 and $73,000. This area is critical because it corresponds to the average purchase price of large holders of the asset, who can intervene to defend their positions.

Even leading investors are adjusting their strategies. Author Robert Kiyosaki recently revealed that he sold $2.25 million worth of BTC for around $90,000, although he stated that he is still optimistic and plans to reinvest his profits.