**Short-Term Holders' Behavior and Market Stability**

When Bitcoin (BTC) prices decline, short-term holders (STH), often referred to as "weak hands," tend to panic-sell, frequently exiting at a loss. This behavior is evident through increased purple bars on the chart, indicating STH sell-offs during market downturns.

As these investors exit, BTC is often transferred to stronger hands, potentially contributing to market stabilization. The overall supply held by STH has notably decreased, particularly following significant sell-offs. This reduction in selling pressure can create opportunities for accumulation and may signal the establishment of a price floor.

Understanding STH dynamics is crucial for identifying market bottoms and potential investment opportunities.