Bitcoin Supply Shifts into Strong Hands, but Demand Remains Elusive

Bitcoin's on-chain structure is showing signs of moving into strong hands as long-term holders continue to tighten supply. According to Axel Adler Jr., an on-chain analyst, Bitcoin is steadily shifting out of speculative hands and into more resilient ownership. This reduction in actively traded supply is evident in the share of short-term holder (STH) realized capitalization, which has fallen to 23.5%, down from 27% one month ago and 40% three months ago.

This is the lowest reading since December 2022-January 2023 market bottom and lower than roughly 96% of Bitcoin's historical trading history. The biggest shift came from coins aged 3-6 months, whose share dropped sharply from 23% to 9% over the last three months.

Meanwhile, long-term holder (LTH) shares have climbed to 52.5%, approaching historical highs and only exceeded once before in 2018. Most of this increase came from the 6-12 month cohort, whose share rose from 27% to 35% as coins continued aging without being spent.

Analyst Darkfost noted that short-term holders continue realizing heavy losses, with STH realized capitalization falling nearly 62% since its October 2025 peak. Previous Bitcoin bear markets saw realized-cap drawdowns of roughly 70%-75%, suggesting the current correction is approaching historical capitulation levels.