Bitcoin’s on-chain structure is beginning to resemble the 2022-2023 bear market bottom, but analysts say one important ingredient is still missing before a meaningful recovery can begin. According to on-chain analyst Axel Adler Jr., Bitcoin is steadily moving out of speculative hands and into long-term holders, reducing the amount of actively traded supply. However, demand has yet to return in a meaningful way, meaning the current setup alone does not guarantee a bullish reversal.
Short-Term Holder Supply Hits Multi-Year Low
Adler’s latest analysis shows the share of Bitcoin’s realized capitalization held by short-term holders (STH) has fallen to 23.5%, down from 27% one month ago and 40% three months ago. This is the lowest reading since the December 2022-January 2023 market bottom and lower than roughly 96% of Bitcoin’s historical trading history.
The biggest shift came from coins aged 3-6 months, whose share dropped sharply from 23% to 9% over the last three months. Rather than being sold, many of these coins simply aged into the next holding category, showing that fewer recently acquired coins are changing hands.
According to Adler, this reflects declining speculative activity and weaker new capital inflows but does not yet prove selling pressure has completely disappeared.
Long-Term Holders Continue Tightening Supply
At the same time, Bitcoin’s long-term holder (LTH) share has climbed to 52.5%, compared to roughly 52% a month ago and 42% three months earlier. The reading is approaching historical highs and has only been exceeded once before, when it reached 55% during the 2018 market cycle.
Most of the increase came from the 6-12 month cohort, whose share rose from 27% to 35% as coins continued aging without being spent.
Adler noted that this does not necessarily mean long-term holders are aggressively buying the dip. Instead, it shows they are simply holding through the correction, reducing liquid supply available in the market.
Capitulation Still Playing Out
Another on-chain analyst, Darkfost, pointed out that short-term holders continue realizing heavy losses. The STH realized capitalization has fallen nearly 62% since its October 2025 peak.
According to him, previous Bitcoin bear markets saw realized-cap drawdowns of roughly 70%-75%, suggesting the current correction is approaching historical capitulation levels. The decline reflects both panic selling at higher prices and fresh accumulation at lower levels, mechanically reducing short-term holder capitalization.
What Could Confirm a Reversal?
Adler believes both charts tell the same story. Realized capitalization is steadily shifting from younger coins to older coins, making Bitcoin’s supply increasingly illiquid.
However, reduced supply alone is not enough to trigger a bull market.
A true regime change would require the short-term holder share to begin rising again alongside higher Bitcoin prices, stronger trading volumes and renewed capital inflows. That would indicate fresh buyers are returning and absorbing available supply.
Until that happens, the market may continue behaving much like it did near the 2022-2023 bottom, with resilient long-term holders, weakening speculative activity, and limited coin turnover. If demand eventually returns, this tighter supply structure could amplify Bitcoin’s next major move.
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