Bitcoin’s recent price action has created a difficult environment for short-term holders. According to on-chain data from CryptoQuant, a significant portion of short-term Bitcoin investors are currently sitting on unrealized losses, meaning they bought their coins at higher prices than what Bitcoin is trading at today.
Short-term holders are generally defined as investors who acquired Bitcoin within the last 155 days. These market participants tend to be more reactive to price swings, making them a crucial segment when evaluating market sentiment and possible price volatility.
Cost Basis Below Market Price
CryptoQuant’s latest analysis highlights that many of these holders are trading below their cost basis. This suggests that their average purchase price is higher than the current spot price of Bitcoin. In practical terms, they are “in the red.”
When a large portion of investors are underwater, the risk of capitulation increases. If prices continue to dip, these holders may decide to cut losses, adding selling pressure to the market. Historically, this kind of pressure can lead to short-term price dips before a possible recovery.
MARKETS: Short-term Bitcoin holders are sitting in a real pain zone, with many trading below their cost basis, per CryptoQuant. pic.twitter.com/VRi1gP6kbf
— Cointelegraph (@Cointelegraph) December 11, 2025
What This Means for the Market
While long-term holders often remain steady during market turbulence, short-term investors tend to react emotionally. If prices stay low, or drop further, we could see increased volatility as these investors begin to exit.
However, this phase could also present a buying opportunity for long-term believers in Bitcoin. When short-term pain reaches its peak, it often marks a period of accumulation for stronger hands.
In conclusion, the current behavior of short-term Bitcoin holders may signal caution in the near term, but it also sets the stage for potential long-term upside.