The main selling pressure in the recent market actually comes from two groups: on one side, long-term holders (LTH) are taking profits and exiting; on the other side, short-term holders (STH) are panic selling after being trapped. The latter are simply afraid of further declines and can’t hold on, while the former are mostly following the old four-year cycle playbook—after all, that theory hasn’t been completely disproven yet.

However, the release of selling pressure happens in stages. For short-term holders, after a concentrated outbreak of panic, as long as prices don’t keep crashing, the wave of selling will naturally weaken—honestly, who really wants to dump BTC at rock-bottom prices? As for long-term holders, once their realized profit and loss ratio narrows, their impulse to sell for profit will also cool off—it’s just human nature.

I’ve actually mentioned this logic repeatedly before, but when prices crash, everyone panics and rational analysis often gets drowned out by emotion. Now is a good time to look back and see if those predictions have been validated by the data.

On-chain data shows that as LTH’s profit and loss ratio continues to narrow, the amount of coins they’re transferring to exchanges has shifted from a previous stair-step increase to a clear decline. Is this a positive enough signal? I think the answer is pretty clear.

The supply side is gradually stabilizing, but demand is still weak. New investors’ performance—whether in terms of address growth or holdings—isn’t impressive. The number of new addresses has barely stabilized after a drop, but the amount of BTC held by new money entering the market remains sluggish. For the market to truly recover, it’s not enough for old players to just be reluctant to sell; we need to see when new entrants will have the courage to jump in and catch the falling knife.