Bitcoin Short-Term Holder Supply Shrinks, Hinting at a Possible Market Bottom

Highlights:

• Fewer short-term holders are holding Bitcoin, which can be a positive market sign.
• More Bitcoin is moving to long-term holders, while new demand is still weak.
• Bitcoin leverage is falling as traders reduce risk and wait for a clearer move.

Bitcoin’s short-term holder supply is shrinking, a trend that on-chain analyst Darkfost says has historically appeared near the end of bear markets. In an August 13 post on X, Darkfost said fewer recently active holders are now controlling Bitcoin supply, while long-term holders are gaining a larger share. Bitcoin was trading near $63,800 at the time of writing.

Darkfost broke the short-term holder supply into several age groups. Bitcoin held for less than one day represented 1.2% of supply, while the one-day-to-one-week group accounted for 2%. Coins held for one week to one month made up 5.6%, followed by 6.7% for one to three months and 8.1% for three to six months.

Why a Shrinking STH Supply Signals Opportunity

“Today this balance is reaching a negative extreme, whch is a positive sign.” – By @Darkfost_Coc pic.twitter.com/Tjt76uo7ms

— CryptoQuant.com (@cryptoquant_com) August 13, 2026

Bitcoin Short-Term Holder Supply Continues to Decline

Short-term holders, often called STHs, are investors whose Bitcoin has moved relatively recently. They tend to react faster to Bitcoin price swings than long-term holders, making their activity useful for tracking market sentiment.

Darkfost described the falling STH share as a positive development because more Bitcoin is moving into the hands of long-term holders. These holders are generally less likely to move their BTC during short-term market swings. Therefore, a growing long-term holder base can reduce the amount of Bitcoin actively circulating in the market.

The analyst said similar shifts have appeared near the end of previous Bitcoin bear markets. However, he did not present the current trend as proof that a new bull market has already started.

Weak Bitcoin Demand Remains a Key Risk

The same on-chain data also points to a weaker part of the market. Darkfost said the declining short-term holder share suggests that strong new Bitcoin demand has not returned yet. When new buyers enter the market, recently purchased BTC increases the supply controlled by short-term holders. During periods of strong demand, the STH share can rise quickly. Darkfost noted that this expansion can eventually become excessive and has historically appeared around market tops.

For now, the balance is moving in the opposite direction. Darkfost described the current level as reaching a “negative extreme,” which he sees as positive from a longer-term positioning perspective. Still, weak demand could limit Bitcoin’s ability to build a sustained price recovery in the near term.

Bitcoin Traders Show Early Signs of Confidence as Leverage Falls

CryptoQuant CEO Ki Young Ju said Bitcoin is currently going through a period of lower market leverage. In an August 13 post on X, he explained that many traders are closing leveraged futures positions and taking profits, which has kept pressure on Bitcoin’s price.

Bitcoin OG traders just had their most profitable cycle ever.

Unlike past cycles, crypto exchange traders were not the exit liquidity. ETFs and DATs were.

That structural bid pushed Binance traders' unrealized profits to nearly triple the 2021 top. 🧵 pic.twitter.com/k2zjo2n4vZ

— Ki Young Ju (@ki_young_ju) August 13, 2026

Ju said futures leverage has fallen from above 0.5 to around 0.3. At the same time, buying activity has recently increased on OKX and other exchanges. He said this could show that some long-time Bitcoin traders are starting to position for a possible recovery. However, Ju warned that the data does not confirm a Bitcoin market bottom. It only provides another sign that trader sentiment may be slowly improving.