No Capitulation, Only Consolidation: What This Bitcoin (BTC) Correction Really Indicates

This isn’t another meltdown. New Analysis Says Bitcoin’s 2025 Pullback Is a Healthy Reset in a Market

Bitcoin (BTC) came under selling pressure again on Thursday as it fell below the $105,000 mark. The latest market downturn has reignited comparisons to previous cycles.

But data from the chain suggests that the landscape in 2025 will be structurally stronger than in 2020 or 2021.

Same shock, new Bitcoin

Unlike past corrections, when foreign exchange reserves soared as investors rushed to sell, CryptoQuant said that current balances are still close to their lowest point in the last ten years. This reflected smaller supply on trading platforms. The scarcity of readily available Bitcoin dampens the potential for a prolonged sell-off and creates conditions for faster stabilization.

Meanwhile, long-term investors appear largely unfazed by the recent volatility. The Long-Term Holder Spent Output Profit Ratio (LTH-SOPR) has remained close to neutral, in stark contrast to the deep sub-1 readings of previous capitulations that signaled massive losses and panic exits.

Instead of dumping positions, these holders selectively realize profits. History shows Bitcoin’s recovery pattern. For example, the March 2020 crash ended the over-indebtedness before the whales started buying again. Also in May 2021, large portfolios repeated the cycle: sell high and then buy low. After the reduction of the US government debt in August 2023, there was another rapid recovery as investors got back on track.

Each cycle demonstrated the market’s growing ability to absorb and recover from shocks. The current setup “does not equate to structural weakness.” Unless a surge in currency inflows triggers broad selling pressure, the analysis suggested that Bitcoin’s current retracement looks less like a capitulation and more like a consolidation.

BTC is still leaving exchanges

Swissblock too observed that Bitcoin’s decline reflects consolidation rather than capitulation. The analytics platform said that after weeks of heavy foreign exchange outflows driven by the accumulation of long-term holders, some selling has resumed but with significantly milder intensity. Despite the shift, BTC continues to flow out of exchanges, even if at a slower pace, indicating that investors largely remain confident and are not rushing to liquidate their positions.

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“The real impact of the weekend’s deleveraging will emerge as participants reposition themselves. So far, the chain’s behavior supports bullish short-term structural consolidation, not panic or forced selling.”