Analysis: The proportion of short-term Bitcoin holders continues to decline, suggesting the market may be approaching the end of the bear market.

CryptoQuant analyst Darkfost published a note stating that the number of short-term holders (STH) in the Bitcoin market is declining, a positive signal. Currently, the share of BTC supply held by STH has dropped significantly: 1.2% is held for less than 1 day, 2% for 1 day to 1 week, 5.6% for 1 week to 1 month, 6.7% for 1 to 3 months, and 8.1% for 3 to 6 months. Darkfost pointed out that this trend has occurred at the end of every previous bear market. On one hand, this means the proportion of long-term holders (LTH) is increasing. Compared to STH, who are active and more sensitive to market fluctuations, BTC held by LTH is less likely to be transferred. On the other hand, the decline in STH proportion also indicates that market demand has not yet returned. Every BTC purchase creates a new STH UTXO; when market demand is strong, the STH-held supply share rises rapidly, often peaking near market tops. Darkfost believes the market is approaching a "negative extreme" state, where market attention and demand remain at low levels while the number of STH continues to decrease, which is typically a positive signal.