Bitcoin is showing signs of recovery after several days marked by selling pressure, volatility and fear throughout the cryptocurrency market. After a sharp flash crash on October 10, when Bitcoin briefly fell to around $103,000, the price has since rebounded and is now testing supply near the $111,000 level. The move brought a temporary sense of relief to traders, but on-chain data suggests the market is still under pressure.
According to CryptoQuant, short-term holders (STHs) – investors who typically hold bitcoin for less than 155 days – are now selling at below cost basis, a clear sign of capitulation. Historically, these capitulation events have often represented late stages of a correction, with weak hands exiting the market while stronger players pile in.
While this may indicate that Bitcoin is approaching a local bottom, uncertainty remains high. The coming days will determine whether this recovery is strong or not maintain – Or if the market will face renewed downward pressure as global risk sentiment remains fragile.
A surrender signal for short-term holders
According to CryptoQuant analyst Maartunn, the resulting profits spent by short-term holders (STH) rate (SOPR) fell to 0.98, marking its lowest level since April 2025. This reading supports the trend that STHs are now selling at a loss, a sign of capitulation within the most reactive sector of the market.
Historically, these declines in STH SOPR correspond to late-stage corrections or market bottoms, as weaker hands are eliminated and coins are moved to stronger holders. During similar phases in 2023, 2024, and early 2025, this measure served as a contrarian signal, often preceding significant rebounds. However, Martin warns that while the capitulation is unfolding, confirmation of the recovery still depends on whether Bitcoin is able to hold above realized price levels and key moving averages.
The market now finds itself at a critical juncture. Bitcoin has rebounded from its lows of $103,000 to hover around $111,000, but momentum remains fragile. A sustained close above the $111,500 to $113,000 area could strengthen the bullish structure in the short term, while failure to hold current support could open the door to deeper corrections towards $100,000 or lower.
If the SOPR stabilizes and begins to rise again, this could confirm the shift from capitulation to re-accumulation – the early stage of a new uptrend. But if selling pressures persist and sentiment weakens further, the market risks entering into a long consolidation phase before the next bull phase begins. Right now, Bitcoin remains on the brink, caught between recovery hopes and macroeconomic uncertainty.
Bitcoin is trying to recover in the short term, but resistance looms
Bitcoin is showing early signs of a short-term recovery, recovering from the October 10 crash that sent prices falling below $104,000. On the 4-hour chart, BTC is currently trading near $111,200, trying to reclaim the short-term moving averages (50 and 100 SMA) after several days of bearish momentum. This rebound reflects a shift in sentiment during the day, but the market remains cautious.
The next major resistance is around $113,000 – $114,000, where the 200 SMA is in line with previous support turned resistance. A break above this area could open the door to a test of $117,500, a key liquidity area that capped rallies earlier this month. However, if Bitcoin fails to cross this level, it risks falling towards $107,000-$106,000, where strong demand was previously evident.
Momentum indicators are improving but not yet convincing. Trading volume remains weak, and funding rates continue to move in negative territory – indicating that traders are still leaning to the downside. This setup is often preceded by larger short squeezes, but confirmation is still lacking.
Bitcoin’s short-term structure favors cautious optimism. Holding above $110,000 would support the recovery narrative, while rejection at higher levels could quickly trigger another retest of the recent lows. The next few sessions will be crucial to confirm the direction of the trend.
Featured image from ChatGPT, chart from TradingView.com
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