Short-Term Bitcoin Holders Face Massive Capitulation

Bitcoin reached a peak above 124,000 dollars… before collapsing below 115,000 in a few days. This brutal drop was not limited to the price. It triggered a massive capitulation of short-term investors, with billions liquidated at a loss. This rare on-chain shock reveals a deep psychological shift in the market. The bullish sentiment is wavering, and one question arises : is this a simple correction or the beginning of a lasting retreat?

A panic move among short-term investors

While suspicious movements are shaking Bitcoin, CryptoQuant analyst Maartunn points out that short-term holders transferred more than 50,000 BTC to exchanges at a loss in only 48 hours, a volume representing approximately $5.69 billion in realized losses.

📉 One of the heaviest loss-driven moves in weeks.

STHs are capitulating: 50,026 BTC (≈$5.69B) flowed from short-term holders to exchanges at a loss over just 2 days. https://t.co/TmOdP7xqZ1 pic.twitter.com/vCr7Q5x2Yn

— Maartunn (@JA_Maartun) August 20, 2025

This figure represents the strongest wave of loss-making sales recorded in over a month. Indeed, these capitulation flows reflect acute stress among recent Bitcoin holders, often more sensitive to sharp market fluctuations. The rapid loss of the $115,000 threshold acted as a psychological trigger, precipitating these sales amid high uncertainty.

The on-chain data published by CryptoQuant reveal the magnitude of the selling pressure, as well as the critical levels that investors are now closely monitoring :

• 50,026 BTC sold at a loss in 48 hours, for a total loss of $5.69 billion;

• This phenomenon occurs just a few days after a significant rejection below the $123,217 resistance level, tested multiple times;

• Analysts identify the $110,000 threshold as the next line of defense, as its breach could open the way to a deeper correction;

• Conversely, stabilization above $115,000–117,000 would be seen as a signal of potential technical recovery.

This context informs on how quickly the confidence of short-term investors can reverse in a market as volatile as Bitcoin’s.

A rebound in sight or a deeper alarm signal?

Beyond the numbers, the interpretation of this move divides analysts. Some see it as a classic “flush-out”, meaning a necessary purge of weak hands, often followed by an accumulation phase. Bullish investors hope that this correction will act as a healthy reset, allowing a return to a healthier dynamic, observes Maartunn.

This scenario assumes that long-term actors, less sensitive to volatility, will take advantage of this drop to strengthen their positions, thus providing a foundation for a potential rebound towards $120,000.

Such an optimistic reading is not shared by all. Other voices warn against a possible repetition of the pattern observed between February and last May, where successive waves of capitulation plunged the market into a prolonged consolidation phase.

In the end, this sequence reveals a growing tension between the short-term logic of speculators and the more structural vision of long-term investors. The crypto market, inherently unstable, relies on fragile equilibria. In the coming days, Bitcoin’s ability to stay above $113,000 will be decisive: either a technical rebound towards its recent highs, namely $124,000, or a new retreat phase fueled by loss of confidence and declining liquidity.