- Bitcoin’s STH MVRV returns to neutral, showing short-term holders remain in profit and the market is neither overbought nor oversold.
- Continuous negative exchange netflows since February 2024 signal declining supply and strong investor conviction despite high BTC prices.
- Institutional accumulation during dips and stable metrics hint that Bitcoin is preparing for a potential breakout amid tightening liquidity.
Bitcoin is entering a pivotal phase as key market indicators reveal an increasingly balanced yet supply-constrained environment. According to analyst Axel Adler Jr., the Short-Term Holder Market Value to Realized Value (STH MVRV) has dropped to its 5-year average, signaling that the spot market is neither overbought nor oversold.
This balance could be crucial. Short-term holders—those who bought Bitcoin within the last 155 days—now have a cost basis of $105,700. Since Bitcoin is trading above this level, most new entrants remain in profit.
Source: Axel Adler Jr
This price-action equilibrium reflects stability, but it also raises anticipation. Adler highlights that the next big market reaction could stem from how Bitcoin interacts with the STH Realized Price. If Bitcoin holds strong above it, short-term investors may show renewed confidence, further fueling upward momentum.
STH MVRV Trends Suggest Market Maturity
Over the past four years, the STH MVRV has reflected Bitcoin’s cyclical nature. During its 2020-2021 bull run, the indicator spiked above 1.6. This indicated massive unrealized profits. Conversely, in 2022’s bear market, it fell below 1, revealing heavy losses. However, today’s neutral MVRV level shows neither extreme.
Moreover, this suggests a more mature market behavior among short-term holders. Bitcoin’s volatility seems to be softening compared to earlier cycles. Hence, investors might now favor long-term conviction over speculative short-term plays.
Exchange Netflows Reinforce Supply Crunch
Besides MVRV, Bitcoin’s exchange flow data supports the idea of a long-term bullish setup. Since February 2024, centralized exchanges have shown mostly negative netflows. Adler confirms that only two days saw net inflows, while most others indicated steady outflows.
Source: Axel Adler Junior
Consequently, this steady movement of coins off exchanges reveals shrinking spot market liquidity. Coins leaving platforms typically signal strong investor conviction and long-term holding. Moreover, the dramatic 18,000 BTC outflow in May—amid a price dip—suggests institutional players were accumulating.
With prices now over $100,000, recent exchange flow trends suggest that demand still outweighs available supply. Accumulation continues even at six-figure levels. Hence, Bitcoin appears to be gearing up for a significant directional move.
