Retail is selling Bitcoin at a loss for the first time in six months while top macro voices declare the “old cycle” dead. If short-term panic meets returning liquidity, we may be looking at a classic transfer from weak hands to whales—but timing the shift is everything. Here’s what’s changing, why it matters, and how traders can turn a fear-driven tape into a structured edge.

Retail Capitulation: What the Data Shows

CryptoQuant reports the STH-SOPR at 0.992, meaning short-term holders are realizing losses on average. The 14-day moving average is also below 1, confirming sustained capitulation rather than a one-day flush.

Historically, durable bottoms often coincide with STH losses as emotional sellers exit and patient buyers accumulate. But confirmation typically arrives when SOPR reclaims and holds above 1.0, signaling a shift from fear to positive momentum.

Why This Matters Now: Liquidity Over Time

Market analyst Merlijn The Trader argues the old Bitcoin cycle defined by rigid halving timelines has broken. With the Fed pivoting toward easier policy, liquidity—not time—is the new driver. That reframes the playbook: macro flows, policy direction, and capital velocity may overpower historical “clock-based” expectations.

For traders, that means volatility around policy headlines, faster trend shifts, and more fakeouts until liquidity direction is clear. Whales typically target areas of resting liquidity (prior highs/lows, liquidation clusters), compounding moves once retail is offside.

Trading Implications: How to Position

• Track STH-SOPR daily and its 14D MA. A sustained reclaim above 1.0 with rising spot volumes is your higher-confidence momentum trigger.
• Accumulate in tranches on red days while SOPR stays sub-1, but define invalidation (e.g., loss of key weekly support or continued SOPR deterioration with expanding losses).
• Fade the first sharp bounce into resistance while SOPR remains below 1.0—rallies often stall near breakeven zones where trapped buyers exit.
• Monitor macro liquidity: DXY, UST yields, Fed balance sheet trends. Improving liquidity + SOPR > 1.0 increases odds of a sustained leg.
• Watch for whale footprints: spot-led pushes, positive CVD divergences, and on-chain accumulation by long-term holders.
• Keep risk tight: use measured position sizing, stop-loss discipline, and avoid chasing wicks into obvious liquidity pockets.

Key Risks

If SOPR remains sub-1 and losses accelerate, it signals persistent distribution risk and a potential grind lower. A sudden macro shock (tightening liquidity, stronger dollar, risk-off in equities) can invalidate local setups. Expect chop and trap dynamics until both liquidity flows and SOPR flip decisively.

One Clear Takeaway

Your actionable edge: treat a sustained STH-SOPR reclaim above 1.0 (ideally alongside the 14D MA) as the switch from “buy weakness carefully” to “buy strength selectively.” Until then, prioritize disciplined accumulation on fear, or tactical mean-reversion shorts into resistance—with tight risk controls.

Bottom Line

Capitulation is here, and liquidity is creeping back. Whether or not the “old cycle” is dead, the signals that matter haven’t changed: respect on-chain loss dynamics, follow the liquidity, and let confirmation—not hope—flip your bias. If you don't want to miss any crypto news, follow my account on X.