The post The Weak Hands Shake, the Smart Hands Take – Outset PR’s Mike Ermolaev on Bitcoin’s Market Moves appeared first on Coinpedia Fintech News
What seems to be a typical correction for seasoned crypto holders is putting unbearable pressure on fresh blood in the market, leading many to sell their coins at a loss. According to Outset PR founder and crypto market expert Mike Ermolaev, this latest wave of selling was triggered by Trump’s tariff announcement and was further fueled by the U.S. inflation report, which dampened hopes for Federal Reserve rate cuts and deepened concerns that the Fed may put off monetary easing for an extended period.
Macroeconomic shifts continue to shape Bitcoin’s market structure, Mike notes, with a recurring pattern emerging—short-term holders panic-sell into weakness, while long-term investors and institutions quietly absorb their supply.
Who’s Selling? Short-Term Holders in the Red
Bitcoin’s inability to sustain a breakout above $105,000 in late January has led to a contraction phase, causing weakening capital inflows across the digital asset market.
Citing Glassnode report, Mike explained that Bitcoin investors locked in $520 million in realized losses during the sell-off to $93,000, marking one of the largest capitulation events of the current bull cycle. Notably, $479.1 million of these losses came from short-term holders (STHs) who had held their coins for just one week to one month.
However, considering only absolute measures of realized loss can be misleading when compared to previous price ranges. As Bitcoin’s market size grows, it becomes more accurate to assess these losses in BTC terms. From this perspective, this magnitude of losses is quite moderate and very typical for a bull market correction. When measured in BTC terms, this amounted to 5.1K BTC—a relatively moderate figure compared to past major capitulation events. For instance, the Yen-Carry Unwind in August 2023 saw a staggering one-day realized loss of 24.8K BTC.
For a bit of historical context, Mike explained that the Yen Carry Trade Unwind event took place on August 5, 2023, and was driven by a sharp reversal in investor behavior. Those who had borrowed in low-interest yen to buy risk assets were forced to unwind their positions as currency and interest rate dynamics shifted, leading to a wave of liquidations across global markets, including Bitcoin.
Citing another recent Glassnode report, Mike noted that short-term holder accumulation patterns are similar to those observed in May 2021, when risk aversion was high. Bitcoin is currently hovering $1K-$5K above the Short-Term Holder cost basis of $92.5K, a level that historically serves as a pivotal bull-bear threshold.
A Typical FUD-Driven Sell-Off
The current correction, according to Mike, appears to be caused by the FUD-driven sell-off of short-term holders rather than any structural macroeconomic shifts.
The panic button among new market entrants was triggered by President Trump’s threat of tariffs on Canada, Mexico, and China, creating an uncertain macro backdrop for investors. Alongside this, the persistent strength of the U.S. dollar has contributed to a marginally stressed liquidity environment.
Adding fuel to the fire, a higher-than-expected U.S. inflation report led to sharp declines across the crypto and stock markets. January’s Consumer Price Index (CPI) rose 0.5%, surpassing expectations of 0.3% and accelerating from December’s 0.4% increase. On an annual basis, inflation climbed to 3.0%, above the forecasted 2.9%.
Meanwhile, Bitcoin ETFs saw outflows exceeding $200 million a day last week, followed by a strong rebound in buy-side activity, making up over 8% of global spot volume. According to Ermolaev, this suggests continued institutional demand for Bitcoin despite short-term market fluctuations.
Retail Traders Exit as Bigger Players Take Control
Analyzing on-chain data further, Mike noted that CryptoQuant’s Retail vs. Large Investor holdings data presents a more nuanced picture. Retail Bitcoin holdings declined from 1.6921 million BTC on January 19 to 1.6906 million BTC as of February 19, 2025. In contrast, larger investors expanded their holdings from 16.4016 million BTC to 16.4488 million BTC in the same period, reinforcing the theory that institutions are absorbing supply.
Further, Mike explained that Bitcoin Magazine Pro data also confirms this trend, revealing that the number of addresses holding more than 100 BTC increased from 17,750 on January 1, 2025, to 18,015 by February 19, 2025. That means 265 new large Bitcoin holders (each with over 100 BTC) have entered the market, reinforcing the ongoing accumulation trend.
Exchange Outflows Confirm Whale Buying
Further supporting the whale accumulation pattern, on-chain exchange netflow data from CryptoQuant reveals a significant BTC outflow event on February 5, 2025. While some inflows have occurred in recent days, the overall trend suggests that whales continue to absorb BTC amid short-term market volatility.
Bitcoin Exchange Netflow (Total) Across All Exchanges | Source: CryptoQuant
Final Takeaway – Strong Hands Take Over
As Mike Ermolaev highlights, the recent market turbulence has once again underscored a well-documented trend in Bitcoin’s history—short-term holders panic-selling while whales accumulate. As the data reveals, retail traders and newer market participants have been the primary sellers during this correction, locking in significant losses.
As seen in the increasing number of large BTC holders and net outflows from exchanges, the current conditions suggest that deep-pocketed players are taking advantage of the fear-driven selling to strengthen their positions. According to Mike, as has long been the case in the market, this continuous shift of supply from weak hands to strong hands fuels the next phase of Bitcoin’s growth.
