Source: Cryptographic Yao

As bitcoin prices gradually rebound, the asset seems to have recently experienced an interesting market trend, indicating a change in its supply distribution.

According to an analyst named 'IT Tech' from CryptoQuant, recent price fluctuations of BTC have led to short-term holders known as 'weak hands' (STH) exiting the market, possibly transferring their assets to long-term investors or 'strong hands'.

Exiting short positions equals market opportunities.

The analyst's article 'Weakness and Bitcoin Decline: Revealing the Behavior of Short-Term Holders during Price Declines' outlines how bitcoin price trends are closely related to STH behavior.

The analyst explains that when bitcoin prices fall, these short-term holders typically panic and sell assets, often incurring losses. An increase in the number of purple bars in the charts shared by the analyst indicates this pattern, showing intensified selling during market downturns.

As STHs exit their positions, these sales typically transfer bitcoin to stronger hands - long-term holders are more likely to accumulate and hold bitcoin during market fluctuations.

CryptoQuant analyst revealed that as these STH continue to sell their held bitcoin due to the market downturn, the overall supply is decreasing, leading to a decrease in selling pressure and possibly stabilizing the market price of bitcoin.

IT Tech emphasizes that understanding the behavior of these short-term holders is crucial to identifying the "market bottom". In theory, when STH exit the market during an economic downturn, it signals the possibility of accumulation opportunities.

In short, the analyst explained that as bitcoin flows to holders unlikely to sell during short-term price declines, the market is more likely to find a "price floor", laying the foundation for future upward momentum.

Bitcoin Market Performance

Following a significant drop to $60,000 earlier last week, investors' bullish hopes for October's "rise" weakened, and bitcoin finally saw a significant price rebound, reclaiming the key level of $64,000.

In particular, as of the time of writing, the trading price of bitcoin is $64,174, rising by 2.7% in the past day. This increase is reflected in the global cryptocurrency market cap, which also rose by 1.8% during the same period, currently estimated at $2.33 trillion.