Executive Summary
The Story So Far
Why This Matters
Who Thinks What?
Bitcoin’s current bull cycle has entered a “historically late phase,” with analytics platform Glassnode reporting profit-taking metrics and capital flow patterns that mirror previous market cycle peaks. This analysis comes as Bitcoin recently slipped nearly 9% from its $124,000 high, prompting questions about the likelihood of further all-time highs in the near term.
According to Glassnode, the current cycle shares notable similarities with the 2015–2018 and 2018–2022 runs, where new all-time highs were typically reached two to three months after the present relative stage. The firm highlighted that Bitcoin’s circulating supply has spent 273 consecutive days above the +1 standard deviation profit band, a duration second only to the 335-day streak observed in the 2015–2018 cycle.
Long-term holders (LTHs) have already realized more profits than in all but one past cycle, signaling a mounting sell-side pressure in the market. Glassnode’s weekly report reinforced the view that the current cycle is “firmly in its historically late phase,” although it noted that in previous cycles, such conditions often preceded new all-time highs within a few months.
The recent price decline saw Bitcoin fall almost 9% from its peak of $124,000, accompanied by weaker capital inflows. The growth of Bitcoin’s realized cap peaked at just 6% per month in recent weeks, a significant drop compared to the 13% rate observed during the $100,000 breakout in late 2024.
Despite the overall profit-taking sentiment, realized profit-taking volumes have softened more recently. Glassnode observed that the most recent attempt to hit an all-time high saw realized profit-taking fall well below the spikes recorded at the $70,000, $100,000, and $122,000 price levels. Realized losses, however, remain moderate at $112 million per day, which is within historical norms for local market corrections.
Contrasting Demand Signals
Renewed Demand from Younger Holders
Despite the prevailing profit-taking pressures, CryptoQuant data suggests a renewed demand from newer market participants. The youngest cohort of Bitcoin holders, defined as wallets under one month old, recently flipped net positive, with their held supply surging by 73,702 BTC in September. Similarly, short-term holders (STHs) are aggressively accumulating, adding 159,098 BTC, indicating that new capital is absorbing coins distributed by long-term holders—a dynamic often seen in sustained bull markets.
Whale Accumulation and Exchange Balances
Adding to the demand side, whales, specifically wallets holding between 10 and 10,000 BTC, have continued their accumulation trend, adding over 56,000 coins since late August. Concurrently, exchange balances have dropped by more than 31,000 BTC in the past month, a trend that typically reduces near-term selling pressure by moving coins off exchanges and into cold storage.
Cautionary Notes on Rebound
Santiment’s Warnings
Onchain insights from Santiment, however, cautioned against expecting an immediate market rebound. The firm noted that retail traders’ eagerness to “buy the dip” has historically preceded further downside movements. Additionally, Santiment’s analysis suggested that current short positions are insufficient to fuel a major short squeeze, which could otherwise propel prices upwards.
Market Sentiment
Market sentiment has shifted to a more negative stance since Bitcoin fell below the $114,000 mark. Analysts observe that while fear levels have increased, they have not yet reached capitulation levels, suggesting there might be further room for sentiment to decline before a potential reversal.
The Bitcoin market presents a complex picture, with Glassnode’s warnings of a “late phase” and significant profit-taking by long-term holders. Yet, these signals are counterbalanced by fresh demand from newer cohorts and continued accumulation by whales, alongside decreasing exchange balances, suggesting a tug-of-war between selling pressure and underlying market strength.
