Bitcoin's Bear Market Bottom Forms, But Demand Still Lacking

Bitcoin's on-chain structure is showing signs of a bear market bottom forming, but analysts warn that demand still needs to return before a meaningful recovery can begin.

According to Axel Adler Jr., Bitcoin's short-term holder (STH) share has fallen to 23.5%, its lowest level since the December 2022-January 2023 market bottom and lower than roughly 96% of Bitcoin's historical trading history.

This indicates that coins are being moved less frequently, but demand has yet to recover. The STH share has dropped sharply from coins aged 3-6 months, whose share fell from 23% to 9% over the last three months. This shows that fewer recently acquired coins are changing hands.

Long-term holders (LTH), on the other hand, have increased their share to 52.5%, approaching historical highs and only exceeded once before during the 2018 market cycle. However, this does not necessarily mean long-term holders are aggressively buying the dip, but rather they are holding through the correction.

Darkfost pointed out that short-term holders continue realizing heavy losses, with STH realized capitalization falling nearly 62% since its October 2025 peak. This decline reflects both panic selling at higher prices and fresh accumulation at lower levels, mechanically reducing short-term holder capitalization.