Under extreme financial pressure at the moment, Bitcoin’s short-term holders (STHs) are seeing unrealized losses pile up as the price of the flagship cryptocurrency remains as volatile as ever. Market participants are worried. But even as the situation feels acute, some experts say the losses are actually within historical norms and still look better than the unrealized loss situation Bitcoin was in in 2015-2016 (again, at a similar stage in the then-current halving cycle). That said, this piece isn’t about prettying up Bitcoin ETF inflows. It explores the possible significance of what these inflows into Bitcoin ETFs might mean for the price of Bitcoin itself. And: what kind of trends, both bearish and bullish, could play out from here. #BTC 's Short-Term Holders are under increasing pressure. Unrealized losses have surged, pushing many STH coins underwater, nearing the +2σ threshold. Still, losses remain within historical bull market bounds and are less severe than the May 2021 sell-off: https://t.co/dybs05jV9T pic.twitter.com/BOauq2MjFi — glassnode (@glassnode) March 21, 2025 Short-Term Holders Feeling the Squeeze Bitcoin’s short-term holders, typically defined as those who have held the asset for less than six months, experience significant unrealized losses as the price of Bitcoin fluctuates. Data reveals that a growing number of STH coins are now underwater, with total unrealized losses nearly at the +2 standard deviation threshold, a level that signals substantial pressure on this part of the market. This is a very concerning trend for anyone who bought Bitcoin at the higher prices we’ve seen in recent months. According to the most current reports, Bitcoin’s short-term holders have sustained an eye-popping $7 billion rolling 30-day realized loss, the largest and most sustained loss event for STHs in this current cycle. The size of this number puts the strain on showing when investors were realized they were better off NOT holding the token that trades on the open market. On the other hand, the severity and size of the short-term losses underreport the amount of upside-downness that holders are really feeling because the reported losses are still not anywhere close to what was reported back in the 2021-2022 period when $19.8 billion and $20.7 billion were the amounts being reported as short-term holder realized losses. Even so, the pressure on short-term holders is increasing, especially as Bitcoin’s price works to hold upward momentum. Many of these investors are almost certainly feeling the weight of their unrealized losses; some are likely even contemplating selling to avoid further losses. This could, in turn, put more downward pressure on Bitcoin’s price. Comparison with Historical Capitulation Events These current unrealized losses need to be put into context. A 30-day period where $7 billion in losses were realized is substantial, but it’s far less than the incredible amounts seen during Bitcoin’s past market downturns. For instance, in 2021 and 2022, we saw capitulation in the prices of Bitcoin (and many other cryptocurrencies). This led to a period of price discovery; i.e., a period where the market found the (much lower) price of Bitcoin that it would trade at going forward. This period of price discovery resulted in some massive sell-offs, and by the end of these capitulations, short-term holders had realized losses in the ranges of $19 billion in 2021 and $20 billion in 2022. The contrast between these earlier capitulation events and the current situation hints that Bitcoin’s short-term holders are under stress but have not yet reached the panic or forced liquidation levels seen in prior cycles. It might mean that the holders who are under stress are waiting to see how this all plays out and have opted to hold their assets instead of selling at what they may perceive to be a price bottom. This is the route short-term holders tend to take in a so-called correction when they choose not to de-risk. ETF Inflows Signal Optimism Despite the challenges that short-term Bitcoin holders are facing, a positive trend seems to be developing for Bitcoin. That is, inflows into Bitcoin exchange-traded funds (ETFs) have continued. On March 21, for instance, Bitcoin spot ETFs registered total net inflows of $83.0919 million. This was the sixth straight day that the ETFs saw net inflows. These ETFs are now managing about $1.496 billion in assets, and that figure is up about 15.64 percent since the start of this month. Retail and institutional investors appear to be growing more optimistic about Bitcoin’s future. On March 21, Bitcoin spot ETFs saw a total net inflow of $83.0919 million, marking six consecutive days of net inflows. In contrast, Ethereum spot ETFs experienced a total net outflow of $18.6309 million, continuing a 13-day streak of net outflows. https://t.co/Hj2Gs48E6C — Wu Blockchain (@WuBlockchain) March 22, 2025 The current inflows into Bitcoin ETFs demonstrate built-up trust in the asset’s enduring worth. Long-term investors seem to want more exposure to Bitcoin but prefer vehicles that are regulated and resemble more traditional investments. If this trend continues, it might help the Bitcoin market serve up a price that is more appealing to those buying it. In that case, the ETF might help constitute something of a “stability ball” for Bitcoin in the short run. Outlook for Bitcoin’s Short-Term Holders The standoff of Bitcoin’s short-term holders is getting tenser by the day, with unrecognized losses swelling as the price of the asset refuses to show any decisive upward momentum. Yet, these unrecognized losses are still relatively modest when stacked against the previous two-thirds or so of the last two Bitcoin market cycles. Yes, short-term holders are feeling the heat—but not in a way that suggests current losses are so painful folks are being forced to throw in the towel. Concurrent with this, the inflows into Bitcoin ETFs ongoing inflows into highlight ETFs into Bitcoin are from institutional investors and show that there is a belief in the long-term potential of this asset class. As long as this trend persists, seems to be in place, there is a knee-jerk market reaction that tends to give short-term holders a bit of cushion from otherwise downward pressures. In conclusion, while holders of Bitcoin in the short term face tough issues with unrealized losses that are becoming more and more substantial, the overall market is still being carried by oh-so-much institutional optimism and a carry-on influx of capital into Bitcoin ETFs. This means that while the next six to twelve months look like they could be quite turbulent for short-term holders of Bitcoin, the much broader picture for Bitcoin looks positive and is probably driven by the continued institutional adoption and support of Bitcoin. Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services. Follow us on Twitter @nulltxnews to stay updated with the latest Crypto, NFT, AI, Cybersecurity, Distributed Computing, and Metaverse news ! Image Source: peshkova / 123RF // Image Effects by Colorcinch
