Bitcoin Weakens Below Key Levels as Long-Term Holders Cash Out Profits

• Bitcoin trades below short-term holders’ cost basis of $113,100, a level that historically triggers market cooling after highs.

• Long-term holders are intensifying sales, increasing from 10,000 BTC per day since July 2025 to over 22,000 BTC, adding downward pressure.

• Glassnode data shows Bitcoin struggling above the 0.85 supply quantile at $108,600, with risks of further drops to $97,500 increasing loss-held supply to 15%.

Discover why Bitcoin’s market weakens as long-term holders cash out gains. Explore cost-basis breakdowns and demand exhaustion signals for informed crypto investing. Stay ahead with expert analysis.

What Is Causing Bitcoin’s Market to Weaken Right Now?

Bitcoin’s market weakening stems from long-term holders cashing out profits after months of gains, combined with slipping below critical cost-basis levels. According to on-chain data from Glassnode, this has led to demand exhaustion, where new inflows slow and prices fail to reclaim support around $113,100. Investors are now facing a test of conviction as broader macroeconomic pressures add to the fragility.

How Are Long-Term Holders Influencing Bitcoin’s Price Action?

Long-term holders, who have held Bitcoin for over 155 days, are driving much of the current selling pressure by realizing gains at elevated prices. Glassnode reports that their daily sales volume has more than doubled since July 2025, rising from approximately 10,000 BTC to over 22,000 BTC. This behavior aligns with historical patterns seen in cycles like 2017 and 2021, where profit-taking preceded extended consolidation periods. As these investors sell into strength, it counteracts short-term rallies and reduces overall market liquidity. Expert analysts at Glassnode note that such distribution often marks the transition from bull market expansion to a digestion phase, allowing time for supply absorption. Short paragraphs like this aid readability, while data underscores the shift: the percentage of Bitcoin in profit could drop to 85% if key supports fail, heightening risks of emotional selling cascades. Institutional players, previously bullish, are also scaling back amid rising Treasury yields and cautious Federal Reserve policies, further tightening liquidity for risk assets like Bitcoin.

Bitcoin’s current position below the short-term holders’ cost basis of $113,100 highlights a psychological threshold where recent buyers entered the market. When prices breach this level after new highs, it typically signals waning enthusiasm and prompts a reevaluation among participants. The cryptocurrency’s struggle to hold above the 0.85 supply quantile at $108,600 adds to concerns, as a drop below could push more supply into unrealized losses. Glassnode’s Supply Quantile Cost Basis model illustrates this vulnerability, showing thinner buy-side support and potential targets at the 0.75 quantile near $97,500 if momentum turns bearish.

Macroeconomic factors are compounding these on-chain signals. With inflation expectations shifting and global liquidity tightening, Bitcoin faces spillover effects from traditional markets. Institutional traders, who once piled in viewing Bitcoin as an inflation hedge, are now reducing exposure amid volatility. Long-term believers hold firm but show restraint in accumulation, waiting for clearer bottom signals. This confluence creates a delicate balance, where short-term weakness tests the asset’s foundational narrative.

Despite the downturn, this phase may serve as a necessary reset. Historical precedents from early 2021 and mid-2023 demonstrate how similar pullbacks led to accumulation and subsequent uptrends. By flushing speculative leverage, the market can stabilize and foster sustainable growth. As long-term holders moderate their sales and spot demand rebuilds, conditions for a breakout above $113,000 could emerge, restoring confidence.

Frequently Asked Questions

What Does It Mean When Bitcoin Falls Below Short-Term Holders’ Cost Basis?

Falling below the short-term holders’ cost basis of $113,100 indicates that recent buyers are underwater, often leading to reduced conviction and market cooling. Glassnode data shows this level acts as key support in bull phases; breaches historically trigger consolidation as enthusiasm fades and profit-taking intensifies among longer-term investors.

Is the Current Bitcoin Profit-Taking by Long-Term Holders a Sign of a Bear Market?

No, this profit-taking by long-term holders, surging to over 22,000 BTC daily since July 2025, more likely signals a transitional phase rather than a full bear market. It mirrors late-cycle dynamics from past bull runs, paving the way for accumulation and renewed strength once demand rebuilds, as seen in previous cycles.

Key Takeaways

• Demand Exhaustion Evident: Bitcoin’s failure to reclaim $113,100 reflects slowing new inflows, with Glassnode highlighting repeated tests eroding support and investor morale.
• Long-Term Holder Impact: Sales volume doubling to 22,000 BTC daily adds sustained pressure, a pattern that historically leads to sideways trading before uptrends resume.
• Path to Recovery: Reclaiming key quantiles like $108,600 could stabilize the market; monitor macroeconomic shifts for signals of fresh inflows and conviction rebuild.

Conclusion

In summary, Bitcoin’s market weakening as long-term holders cash out gains underscores a shift toward caution, with cost-basis breakdowns and demand exhaustion per Glassnode’s analysis pointing to consolidation risks. Yet, this could foster a healthier foundation, echoing resilient recoveries from 2021 and 2023. As macroeconomic pressures ease, watch for renewed spot demand to drive Bitcoin above $113,000, signaling the next phase of growth for savvy investors.