Short-Term Holders: Bitcoin On-Chain Analysis

Written by Sean GraytokUpdated: 12th Nov 2021
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This article will define Short-Term Holders and show how changes in their behavior can indicate shifts in Bitcoin’s market structure.

What are Short-Term Holders?

Short-Term Holders (STHs) are entities that own coins younger than 155 days, meaning their coins have been transacted within the last 155 days, which is about five months.

The on-chain platform Glassnode observed that coins younger than 155 days have a statistically higher chance of being spent than coins that exceed this threshold in age.

Glassnode’s realization allowed them to separate investors into two cohorts: Short-Term Holders and Long-Term Holders.

Once a coin ages beyond the five-month threshold, it belongs to a Long-Term Holder.

The ability to distinguish different market participants based on their maturity provides a level of granularity that is not possible with traditional financial analysis.

For example, Short-Term Holders tend to be new market participants that enter the Bitcoin market when price increases and leave the market when the price decreases.

Additionally, on-chain data can reveal whether STHs are in aggregate profit or loss and the degree of profit and loss.

This helps measure fear and greed in the market, which can be valuable when speculating on the current cycle stage or when the market may be getting overheated.

Understanding Short-Term Holder Behavior

On-chain metrics allow us to quantify the trading behavior of Short-Term Holders and track their total supply relative to the supply held by Long-Term Holders.

Monitoring Short-Term Holder Supply can signal when there’s been a trend change in supply dynamics, which allows us to better contemplate the current stage of a bull or bear market.

The chart below compares the price of bitcoin with STH Supply (orange) and LTH Supply (blue):

Short-Term Holders (STH) Chart Analysis

There’s clearly an inverse relationship between STH Supply and LTH Supply, where the former consists mainly of new market participants, and the latter consists mainly of “smart money” participants.

Notice that STH Supply increases as the price of bitcoin increases. This is new demand coming into the market and increasing the price, which attracts even newer demand because the price is increasing.

Once the new entrants create enough momentum in the market, Long-Term Holders begin to sell into the strength, decreasing their supply and offloading their coins to STHs.

Momentum can only take the price so far, and demand eventually dries up.

Price tops out and tends to correct rather aggressively, which scares STHs, who may not have experienced this level of volatility before, so they panic sell.

STHs sell their coins back to LTHs during periods of maximum fear, decreasing STH Supply and increasing LTH Supply.

Remember, there’s an inverse relationship between STHs and LTHs: whatever STHs are doing, LTHs are doing the opposite.

LTHs continue to accumulate throughout the bear market until new demand eventually returns, at which point they sell into the momentum and start this cycle over again.

The supply dynamics between Short-Term Holders and Long-Term Holders have played out similarly in the cyclical tops of 2011, 2013, 2017, and the mid-cycle 2021 top.

Short-Term Holder Charts and Analysis

The STHs and LTHs can be captured in the STH:LTH Supply Ratio, an on-chain metric used to predict “Supply Shocks” in the Bitcoin market.

Let’s take a look at the chart below, created by Will Climente:

STH-LTH Supply Ratio

A rising green line indicates that LTHs are selling their coins to STHs.

A falling green line indicates that LTHs are buying their coins back from STHs.

The green line bottoming out means Long-Term Holders have locked up the largest amount of supply relative to Short-Term Holders, historically signaling we’re at the bottom of a macro correction.

Long-Term Holder accumulation has peaked when the green touches the bottom blue trendline, thus setting the stage for a Supply Shock.

Here are some quick takeaways from the above chart:

  • STHs reach peak accumulation at macro tops (bearish)
  • LTHs reach peak accumulation at macro bottoms (bullish)
  • Green line touching the top blue trendline suggests macro top (bearish)
  • The green line touching the bottom blue trend line suggests macro bottom (bullish)

Other Short-Term Holder Metrics to Watch

In addition to supply dynamics, other on-chain metrics can be analyzed from the Short-Term Holder perspective.

For example, we can apply an STH lens on the Spent Output Profit Ratio (SOPR) and the Market Value teo Realized Value (MVRV) Ratio.


STH-SOPR measures the price sold versus the price paid for coins from Short-Term Holders. It helps determine the conviction and market sentient of Short-Term Holders.

This metric oscillates around the number 1, where an STH-SOPR above 1 means Short-Term Holders are selling in profit and a number below 1 means they’re selling at a loss.

As previously mentioned, STHs tend to sell during periods of fear when the price is falling, resulting in many STHs panic selling coins at a market price that is less than the price they paid to acquire them.

An STH-SOPR value below 1 quantifies this behavior, and a value well below 1 has signaled market bottoms, i.e., great buying opportunities.


STH-MVRV measures whether bitcoin is relatively overvalued or undervalued from the Short-Term Holder perspective.

It is essentially the cost-basis of Short-Term Holders.

An STH-MVRV value above 1 means that Short-Term Holders are in profit, as the market value of their coins is larger than the value of them when they were last transacted on-chain.

Short-Term Holders tend to buy when the price increases, thus increasing the STH-MVRV value and suggesting the market may be overvalued in the short term.

This metric captures the “greed” of Short-Term Holders, and a value above 2 has been a reliable top indicator, i.e., exit opportunities or not-buying opportunities.

Bottom Line: Short-Term Holders in Bitcoin

In sum, Short-Term Holders tend to be the catalyst that gets the bull run going and the weak hands that quickly sell when price action goes the other way.

Studying their behavior across a variety of on-chain metrics can reveal valuable insights into market structure and sentiment.

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This article is for informational purposes only. It is not intended to be investment advice.

Sean Graytok
Sean Graytok

Sean Graytok is our Co-Founder and leading expert in investing and financial management. His work has been cited in leading industry publications, such as InvestorPlace and Business Insider. Sean is interested in the people and technologies that are improving the world.