Bitcoin’s STH Divergence Raises Speculation on Potential Market Correction Post-October 2025

• With Bitcoin’s recent rally, the divergence between short-term holders (STHs) and long-term holders (LTHs) highlights potential correction risks in the crypto market.

• As STHs begin to offload assets amid rising prices, analysts are increasingly concerned about a top-heavy market dynamic.

• “The sharp spike in STH distribution signals a crucial shift in market sentiment,” said an expert from COINOTAG.

Bitcoin’s rally has raised concerns of a potential market correction as STH distribution spikes, igniting debate among crypto analysts.

The Impact of STH Distribution on Market Dynamics

Recent data illustrates a stark departure from previous bull cycles. Short-term holders are not accumulating Bitcoin (BTC) despite approaching all-time highs, a phenomenon not typically observed during price rallies. Historical trends show that during such run-ups, the STH supply would usually increase, fueling further momentum in the market.

A Shift in Accumulation Patterns

This time, however, STH supply has remained relatively stable, mirroring late-stage cycles where coins frequently change hands at market peaks. Meanwhile, LTHs are demonstrating a pattern of distribution, indicating a significant shift in market sentiment and conviction among holders. This lack of fresh accumulation signals fragile demand, potentially setting the stage for a top-heavy market where sell pressure may increase sharply.

Understanding the Realized Price of STHs

Currently, the STH Realized Price has surged to an impressive $94.5K, a historically pivotal marker indicating potential market maturity and a looming correction. In contrast, the LTH Realized Price remains at $33K, creating a wide divergence that often precedes significant market adjustments. With many recent buyers sitting on unrealized gains, the atmosphere is ripe for profit-taking, heightening the risk of a downward correction in the near future.

Distribution Patterns Signal Market Cooling

The distribution wave from STHs has been dominant, consistently outpacing accumulation spikes since early 2025. Despite Bitcoin’s upward trajectory, persistent net outflows indicate that STHs are capitalizing on recent price increases, further raising alarms about market sustainability. If recent trends persist, the market may encounter significant challenges in maintaining current price levels as STHs leverage rallies for exit liquidity.

Conclusion

In summary, the ongoing pattern of STH distribution, combined with the significant divergence in realized prices, suggests that we may be on the brink of a market correction. As demand wanes and sell pressure increases, investors should remain vigilant and prepared for potential volatility in the coming months, particularly as we approach important market cycles and halving events.