Short-term holder supply sees profitability crash to 2% as tariff fears bite

Short‑term holder supply in profit measures the share of coins held for fewer than 155 days whose last on‑chain movement occurred at a price below the current spot. Since these coins are statistically the most mobile, the metric is an effective thermometer for near‑term selling pressure: when the percentage is high, a larger share of speculative wallets sits on latent gains that can be realized quickly; when it collapses, the same cohort is underwater and historically becomes more price‑sensitive to the downside.

At the start of the year, 54.76 % of short‑term supply was in profit, with Bitcoin trading near  $94,400. A two‑week rally pushed the share to 95 % on  Jan. 17 while the spot rate peaked above  $104,000, leaving almost every coin acquired since mid‑September in the green. However, the euphoric reading proved transitory.

By  Feb. 20, after a swift $5,800 retracement, profitable short‑term supply fell to 67.82 %. The real capitulation arrived in April as tariff headlines sparked cross‑asset risk aversion. Bitcoin slid from  $82,500 on  April 2 to an intra‑month low of  $78,400 on April 6; the percentage of short‑term coins in profit collapsed from 12.02 % to a YTD low of 2.07 %. On those dates, less than one in 50 recently moved coins carried an unrealized gain, a condition previously observed only during panic liquidations in 2022 and the week of FTX’s crash in November  2024.

The market then attempted a rebound. A White House carve‑out that spared smartphones, laptops, and chip‑making equipment from the 145 % reciprocal tariff schedule briefly lifted risk appetite. This caused Bitcoin to rebound to  $84,600 on  April 14, and the profitable share of short‑term supply recovered to a high of 26.39 %.

Long‑term holders tell a very different story. Their supply has remained essentially fully profitable all year: 100 % through the first quarter and 99.90 % even after the April drawdown. This divergence shows that recent volatility is a short‑horizon phenomenon driven by traders who entered near the cycle top; coins accumulated before November  2024 still carry a large cushion compared to the current spot price.

The path of short-term holder supply maps cleanly onto Bitcoin’s spot price. When the price set its year‑to‑date high, virtually every coin bought since the ETF approval rally was profitable; once macro stress hit, more than 90 % of those same coins moved underwater. Such swings matter because on‑chain spending patterns show that short‑term wallets are responsible for the majority of intraday sell pressure during corrections. The steep April washout, accompanied by a record $1 billion liquidation day and a two‑point drop in the funding rate curve, matches historical capitulation signatures that have often preceded local price bottoms.

Macro conditions explain why the recovery has been hesitant. Container‑booking data reveal a 64 % collapse in US imports and a 30 % drop in exports after the March tariff escalation, feeding fears of an earnings shock that weighs on all risk assets. The same data set has sparked debate over whether corporate treasuries will add Bitcoin as a tariff hedge, but flows into spot ETFs remain muted. Until clarity emerges on the trajectory of US-China negotiations, short‑term holders face a narrower window to exit breakeven trades, capping upside follow‑through.

The collapse in short‑term holder profitability has two immediate consequences. First, it removes a large block of latent supply: wallets sitting on losses are statistically less likely to market‑sell, so day‑to‑day offer depth thins out when the metric drops into single digits. That helps explain why the spot slipped below $79,000 only briefly on  April 6 before rebounding, as there simply was not enough profit‑taking inventory to meet bid support once liquidations cleared.

Second, it sets an invisible ceiling: as price claws back toward the $87,000–$90,000 cost‑basis band for coins bought in February and March, those underwater wallets regain parity and often sell into strength, creating overhead resistance. The market, therefore, enters a reflexive zone where each $1,000 of upside converts roughly 60,000 to 70,000 STH coins from loss to profit, gradually replenishing offer books and tempering rallies until new external demand absorbs the flow.

The near‑perfect profitability of long‑term supply is essentially a legacy of the spot ETF buying spree that accelerated from July through December  2024. ETF issuers attracted $35.5 billion in net flows by April 16, with most of those coins custodied at an average acquisition price between $55,000 and $75,000. The largest inflows we’ve seen during Bitcoin’s ATH have mostly aged past the 155-day threshold and graduated into the long-term cohort, locking in double-digit gains. This ETF‑driven migration helps keep the long‑term holder profitability ratio pinned near 100 %, even as the spot price corrects and reinforces the structural supply scarcity that underlies Bitcoin’s broader bullish bias.

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