Panic selling from short-term holders is accelerating just as a top analyst declares the “old Bitcoin cycle” dead—setting up a rare window where capitulation collides with returning liquidity. With the Short-Term Holder SOPR dipping to 0.992—its lowest since April—retail is locking in losses while whales appear to be stalking fresh liquidity. If the market’s heartbeat really shifts from halving timers to central bank policy, the next big move may arrive sooner—and sharper—than most expect.

Retail Capitulates: STH-SOPR Slips Below 1.0

CryptoQuant data shows STH-SOPR below 1.0, meaning coins held <155 days are being sold at a loss (about 0.8% per sale). The 14-day moving average is also under 1, signaling sustained stress—not a one-off wick. Historically, deep STH losses often accompany late-stage corrections that precede recoveries. But until SOPR reclaims and holds above 1.0, bounces can stall as trapped buyers sell at breakeven.

Why This Matters to Traders

Sub-1.0 SOPR typically marks a “cleansing phase” where weak hands exit and stronger hands accumulate. That creates: - Short-term overhead resistance as recent buyers look to exit near entry. - Higher odds of whipsaw volatility. - A growing probability of base-building if losses persist but stabilize—especially if larger players keep absorbing supply.

“The Old Cycle Is Dead”: Liquidity > Time

Analyst Merlijn The Trader argues the 1064/364-day rhythm that shaped prior cycles is breaking as the Fed pivots back to easing. The claim: liquidity, not time, will drive this cycle. If correct, traders should prioritize capital flows (central bank balance sheets, dollar strength, real yields, stablecoin supply) over rigid halving-derived timelines. In practice, this can compress or elongate trend phases and produce sharper rotations.

Actionable Edge: Trade the Liquidity, Not the Calendar

• Confirm the shift: Look for STH-SOPR to reclaim and hold >1.0 on daily and 14D MA—historically a cleaner sign that fear-driven selling is fading.
• Track accumulation: Monitor exchange reserves (downtrend = accumulation), whale net position change, and stablecoin netflows (inflows to exchanges can front-run risk-on).
• Watch macro liquidity: Fed balance sheet trend, RRP drawdowns, TGA changes, DXY, and real yields. Easing + softer USD often supports crypto.
• Execution playbook: Stagger bids at high-liquidity zones; use lower leverage during capitulation; hedge with short-dated puts; consider call spreads or calendars for asymmetric upside.
• Invalidation and timing: If SOPR fails to reclaim >1.0 and price loses recent swing lows on rising open interest, expect further flush and stand aside until liquidations peak.

Key Risks

False bottoms are common when SOPR hovers below 1.0. A stronger-than-expected inflation print, renewed dollar strength, or hawkish policy surprise can drain liquidity and extend drawdowns. Also watch for distribution into strength—early rallies can be sold by trapped longs and whales managing inventory.

Bottom Line

Short-term pain is evident, but historically this is where longer-term opportunity begins. Focus on a SOPR reclaim above 1.0 and improving liquidity gauges as your confirmation stack. Fade euphoria, buy fear with a plan, and let liquidity—not the calendar—set your bias.

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