Executive Summary
The Story So Far
Why This Matters
Who Thinks What?
Bitcoin’s current price action is mirroring historical bull market consolidation phases, with new research from crypto analytics firm Glassnode indicating that the asset may need to fall to approximately $104,000 to trigger a period of “seller exhaustion.” Published in its September 4 “The Week Onchain” newsletter, Glassnode’s analysis suggests that the leading cryptocurrency is undergoing a “textbook correction phase” following its recent all-time highs.
Current Market Consolidation
Despite gold and traditional risk assets experiencing upward momentum, BTC/USD remains range-bound, trading between 10% and 15% below its most recent all-time high achieved in August. This period of stagnation has unsettled some market participants who expected a swift return to bullish trends.
Glassnode categorizes this phase as “post euphoria consolidation,” noting a new “consolidation corridor” for Bitcoin’s price. Since its mid-August peak, Bitcoin has navigated a volatile downtrend, initially declining to $108,000 before rebounding towards $112,000.
Key Price Levels and Quantile Analysis
Researchers at Glassnode examined the price at which the active Bitcoin supply last moved, segmenting it into various “quantiles.” The 0.95 quantile, representing the price where 95% of the supply is in profit, is particularly significant in their findings.
Currently, Bitcoin’s price is trading within the 0.85 and 0.95 quantile cost basis, a range spanning $104,100 to $114,300. Historically, this zone has served as a consolidation corridor after periods of euphoric price peaks, often leading to choppy, sideways market movements.
According to Glassnode, a break below $104,100 would signify a replay of post-all-time-high exhaustion phases observed earlier in this market cycle. Conversely, a recovery above $114,300 would indicate that demand is re-establishing its footing and reclaiming control of the market trend.
Short-Term Holder Behavior
Another crucial metric under observation is the aggregate buy-in level for Bitcoin speculators, known as short-term holders (STHs). These entities, defined as those holding Bitcoin for up to six months, traditionally provide price support during bull market corrections.
Glassnode highlighted that STH profitability has fluctuated rapidly within the current price range. Following the dip to $108,000, the percentage of short-term holder supply in profit plummeted from over 90% to just 42%, signaling a rapid cooling-off from an overheated state to one of “sudden stress.”
This dynamic suggests that STHs can react sharply to their profitability turning negative, but they quickly become exhausted from selling at a loss, which can enable a market bounce. This pattern, Glassnode adds, helps explain the recent rebound from $108,000 back to $112,000.
Broader Market Context
The analytics firm also noted that the August highs marked Bitcoin’s third “euphoric uptrend” within the current bull market. Such rapid, parabolic moves are inherently unsustainable over extended periods, making the current consolidation a natural market response.
In summary, while Bitcoin’s volatility continues to create uncertainty, Glassnode’s research frames the current market as a necessary, textbook correction phase. The $104,000 level emerges as a critical threshold for determining whether the market will experience further seller exhaustion or find a solid base for recovery.
