Bitcoin could be headed for a deeper correction as cumulative realized long-term holder profit taking has now reached levels seen in previous market cycle tops, according to onchain analysis.
Long-term holders realized 3.4 million Bitcoin (BTC) in profit, and exchange-traded fund inflows have slowed, according to Glassnode, a sign of “exhaustion” after the Federal Reserve cut rates last week.
Bitcoin has now fallen below key support levels at around $112,000, hitting a four-week low of $108,700 on Coinbase in late Thursday trading, according to TradingView.
It has yet to fall back to $107,500, as it did on Sept. 1, but analysts say it could be headed that way.
The bounce back from that dip “quickly lost momentum, and with prices now hovering close to this level again, another wave of stop-loss selling could emerge,” said 10x Research head Markus Thielen in a note shared with Cointelegraph.
“This comes at a time when many are positioned for a Q4 rally — making the bigger surprise not a surge higher, but a correction instead.”
Cooling phase ahead for Bitcoin, says Glassnode
Glassnode reported this week that the realized profit/loss ratio shows that profit-taking has exceeded 90% of coins moved three separate times this cycle, with the market having just stepped away from the third such extreme.
Historically, these peaks have marked major cycle tops, and “probabilities favor a cooling phase ahead,” it stated.
Some Bitcoiners are selling at a loss
Thielen also stated that the Spent Output Profit Ratio (SOPR) is showing concerning behavior as some Bitcoin holders are beginning to sell at a loss, which historically marks significant market stress.
In bull markets, SOPR dips below 1 can flag exhaustion of sellers and precede rebounds, while in bear markets, rejections at or above 1 often signal renewed downside pressure. The ratio is currently at 1.01, according to Glassnode.
Related: Bitcoin crumbles below $109K, but data shows buyers stepping in
More critically, the Short-Term Holder Net Unrealized Profit/Loss (NUPL) is approaching zero, threatening to trigger liquidations as newer holders “quickly cut their losses,” he said.
Where to next for Bitcoin?
Glassnode analysts concluded that unless demand from institutions and holders aligns again, “the risk of deeper cooling remains high, highlighting a macro structure that increasingly resembles exhaustion.”
Meanwhile, Thielen said the firm remains neutral, “unless Bitcoin can reclaim $115,000.”
Strategy chair Michael Saylor was more optimistic, saying earlier this week that Bitcoin will gain in Q4 after macro headwinds subside.
The asset was trading at $109,645 at the time of writing, having lost 6.5% over the past week.
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