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Bitcoin Bear Market Deepens as Short-Term Holders Face Pain

What is happening to Bitcoin right now?

On Wednesday, a CryptoQuant analyst who goes by the nickname Darkfost said that people who bought Bitcoin recently, and haven’t held it for a long time, are still losing money as the price stays lower than where they bought it. In crypto markets, people like to talk about who owns Bitcoin and how expensive it is for them to hold. Darkfost explained that the average price paid by these short-term holders (we call this the cost basis) is about $94,200 per Bitcoin. But the current price of Bitcoin is around $67,000. This creates a gap of about 28 percent. In simple terms, if you bought Bitcoin recently, you might be looking at a paper loss of roughly 28 percent right now. An unrealized loss is a loss you see on paper because you haven’t sold yet. It becomes real only when you sell the Bitcoin at a lower price than you bought it for.

Darkfost’s main takeaway is that this is not just a small correction. A correction is a price drop of 10% to 20% from a recent high. The analyst says Bitcoin has been trading below the average price paid by short-term holders for four months. This four-month stretch is the longest time such holders have felt pressure in this cycle. The situation, he says, is unusual. He believes it could be turning into a bear market, which is when prices fall and stay low for a long period. In the two previous bear markets, these tough times lasted a little over a year. Darkfost warns that this cycle may repeat that pattern or even stretch longer.

In short, short-term holders are suffering as the market drags on. With the cost basis around $94,200 and Bitcoin around $67,000, the price gap sits around 28%. If we simplify things, we can say the average unrealized loss for these holders is about 28%, though not every holder lost the same amount. The market is complex, and different buyers bought at different times, so losses are not the same for everyone.

Why is the lack of new money important? Another factor, noted by CryptoQuant on Wednesday, is a lack of fresh capital. This means new money is not entering the market to buy Bitcoin when prices dip. In a healthy bull market, every drop often brings in more buyers who believe the price will rise again. In early bear markets, weakness in price can cause people to pull their money out of the market. When new money isn’t coming in, selling pressure can push prices down even more. This creates a difficult feedback loop where falling prices discourage new buyers, and existing holders may sell to avoid further losses.

Analyst Daan Trades Crypto offered a technical view. He looked at a tool called Fibonacci retracement. This is a method traders use to find possible levels where the price might find support or resistance after moving in one direction. The idea is that prices often pause or reverse at certain key levels. After Bitcoin briefly paused near the .382 Fibonacci level, the price fell again and broke the pattern the market had followed this cycle. The next important level to watch is the .618 retracement, which is currently around $57,800. Analysts think this could be the next support zone where buyers might step in to stop the decline or push prices higher again.

On the other hand, there are signs some people who hold Bitcoin for a long time are starting to accumulate again. Bitfinex analysts noted that the supply held by long-term holders has turned up after months of distribution and is now back near 14.3 million BTC. Long-term holders are people who plan to keep their Bitcoin for a long time, not just a few weeks. If this buildup continues, it supports the idea that this is a mid-cycle reset rather than a final top. In other words, this could be a pause in the market rather than the end of the big upward move.

Bitfinex also pointed out a historical pattern: in past cycles, fresh highs in long-term holder supply tended to lead Bitcoin’s price by about 3 to 4 months. If the current buildup continues, some investors think the market could still recover in the months ahead, but that recovery would likely look different from the last bull run. These are not guarantees, but many people watch these long-term holders to gauge what could happen next.

Prices in the real market moved lower again. Bitcoin fell to about $66,000 in late trading on Wednesday. In Asia on Thursday morning, it was around $67,200, but the overall trend remained downward. Ethereum, the second-largest cryptocurrency, did not manage to stay above the important $2,000 level. It dropped to about $1,950. While Ethereum is near lows seen in March 2025, it has not yet reached the lows of the larger drop in April 2025. These price moves show that the entire crypto market is under pressure, not just Bitcoin.

Overall, many analysts say the market is in a difficult period. The headline note from CryptoPotato summarized the situation as: “Short-Term Bitcoin Holders in Pain as Bear Market Deepens.” This kind of news highlights how the market can hurt people who bought recently and how a lack of new money can push prices lower for longer than people might expect.

To help readers understand what all these terms mean, here are simple explanations of some technical words you might hear in these stories. Short-term holders, costs basis, bear market, and Fibonacci retracement are explained in the Definitions section at the end of this article.

Key ideas in plain language

Short-term holders (STHs) are people who bought Bitcoin recently. They haven’t kept their coins for a long time. They usually expect the price to go up soon, but when the price falls, they can lose money quickly. The cost basis is the average price they paid for their Bitcoin. If the market price is lower than the cost basis, they see a loss on paper. This is called an unrealized loss because they haven’t sold yet to lock in the loss.

A bear market is when prices fall and stay low for a long time. It’s different from a correction, which is a shorter drop. In a bear market, investors often feel more pessimistic, and many people avoid buying. A lack of fresh capital means new money coming into the market is small or negative. This makes it harder for prices to recover because there are fewer buyers to push prices back up. In contrast, during a bull market, new money and more buyers usually push prices higher.

Fibonacci retracement is a simple math tool traders use to guess where prices might pause or turn around after moving up or down. The .382 and .618 levels are common points to watch. If the price reaches these levels and doesn’t hold, it might fall further. If it finds support there, it may bounce back. These levels are not guaranteed and depend on many other factors, but they help traders decide what might happen next.

Long-term holders (LTHs) are people who keep Bitcoin for months or years, not days. When long-term holders start to accumulate more coins, it can be a sign that big investors expect prices to recover later. Bitfinex’s comment that LTH supply is rising again is seen by some as a sign that the market could be in a mid-cycle reset rather than finishing the bull run. In past cycles, the increase in long-term holders often happened a few months before larger price moves.

In short, the market is watching a mix of short-term behavior, long-term accumulation, and the flow of new money to predict what might happen next. While some signals point toward a possible recovery, others show ongoing pressure. As always in crypto, there are no guarantees, and prices can move quickly in either direction.

Definitions