XWIN Research, a prominent crypto research group, has identified key factors contributing to the ongoing Bitcoin downtrend. Bitcoin (BTC) has experienced a significant pullback in recent weeks. After reaching a high of $107,465 on November 11, it encountered strong resistance and subsequently fell below $100,000 two days later.
At its current price of $94,700, Bitcoin is nearly 12% below its November 11 peak. For November, the leading cryptocurrency has declined by over 13%, reducing its year-to-date gain to approximately 2.1%.
XWIN Research Attributes Downtrend to Short-Term Holders
Amidst the prevailing market uncertainty, XWIN Research has highlighted several factors fueling the recent price drop. The research team noted that various authors on CryptoQuant have discussed the downturn, debating whether long-term holders (LTHs) or short-term holders (STHs) were primarily responsible for the selling pressure.
XWIN Research concluded that short-term holders played the most significant role in the steepest phase of the decline. Their analysis indicated that the Short-Term Holder Spent Output Profit Ratio dipped below 1 on multiple occasions, signaling that short-term holders were actively realizing losses.
Furthermore, their examination of Spent Output Age Bands revealed that holders with coins younger than three months constituted the majority of the spent volume during the downturn. This pattern strongly suggests that short-term holders exerted the most immediate and forceful pressure on the price.
In contrast, XWIN Research observed that while long-term holders also increased their selling, this behavior aligns with typical bull market activity.
The firm pointed out that metrics such as Coin Days Destroyed, Realized Profit, and Long-Term Holder Net Position Change all showed increased distribution from long-term holders since September. However, they clarified that these trends do not resemble the substantial, late-cycle blow-off selling characteristic of previous market tops.
Bitcoin STH Marginal Selling Fueled the Drop
The research firm further emphasized that marginal selling pressure originated from short-term holders who unwound leverage during the price decline.
According to the report, markets typically react more intensely to marginal selling during periods of stress. Consequently, leveraged short-term holders initiated rapid sell-offs and liquidations, driving the market down more aggressively, even though long-term holders sold larger total volumes over several months.
The analysis also focused on Realized Capitalization, confirming its continued rise during the correction. This increase indicates that new short-term holder inflows were still entering the market.
However, these inflows did not fully counteract the short-term holder capitulation and the steady distribution from long-term holders. In essence, while Bitcoin long-term holders created background selling pressure, the sharp drop from the $126,000 level was primarily caused by short-term holder capitulation and deleveraging.
Despite the persistent declines, XWIN Research suggested that the overall on-chain structure indicates a normal bull market correction rather than the end of a cycle.
CryptoQuant CEO Points to Bitcoin LTH Distribution
Concurrently, CryptoQuant CEO Ki Young Ju maintained that the downtrend resulted from long-term holders transferring coins among themselves, with older holders selling to traditional finance participants who intend to hold for extended periods.
He explained that he had previously predicted a top earlier in the year due to heavy selling from older whales. However, he acknowledged that the market structure evolved as ETFs, Strategy, and other significant buyers continued to inject liquidity.
According to Ju, on-chain inflows remain robust, and the current decline is attributed to older whales driving the market downward. He noted that sovereign funds, pension funds, multi-asset funds, and corporate treasuries are establishing even larger liquidity channels, which challenges the traditional cycle theory until these channels eventually slow down.
Analysts Eyeing Recovery Attempt
Meanwhile, Glassnode has begun highlighting positive signals within the market. In a recent disclosure, the firm observed that distribution pressure has started to ease across major holder groups. They explained that several cohorts have reduced their heavy selling following weeks of intense activity, suggesting that the most aggressive supply might now be fading.
Market veteran Michaël van de Poppe is closely watching for a recovery attempt. He noted his expectation for Bitcoin to bounce quickly, confirming that the market has swept the weekend low around $93,000 and now needs to form a higher low.
He believes that a successful higher low formation would expose substantial short liquidity and trigger a strong upward move. According to his analysis, BTC must hold the $94,000 level to attempt a push towards $100,000 this week.
