TLDR
- Bitcoin has fallen to a four-week low, indicating growing market exhaustion.
- Long-term holders have realized 3.4 million BTC in profit, signaling potential cycle peaks.
- The realized profit/loss ratio has exceeded 90% of coins moved three times during this cycle.
- The Spent Output Profit Ratio (SOPR) at 1.01 suggests renewed downside pressure for Bitcoin.
- The Short-Term Holder Net Unrealized Profit/Loss (NUPL) approaching zero raises the risk of liquidations.
Bitcoin has dropped to a four-week low, signaling growing exhaustion in the market. Long-term holders have realized significant profits, and recent on-chain data points to further market cooling. As the cryptocurrency faces increasing uncertainty, analysts suggest Bitcoin might be on track for a deeper correction.
Bitcoin’s Profit-Taking Reaches Cycle Highs
According to Glassnode, long-term Bitcoin holders have realized 3.4 million BTC in profit. This marks a peak in profit-taking similar to previous market cycle tops. The realized profit/loss ratio has exceeded 90% of coins moved three times during this cycle, further indicating a potential market top.
Analysts suggest that these levels of profit-taking often precede cooling phases in the market. Historically, such peaks have signaled significant corrections. Glassnode’s report highlights that the market has recently stepped away from the third such extreme, signaling potential downside pressure.
The Spent Output Profit Ratio (SOPR) also signals market stress. As Bitcoin holders begin selling at a loss, the market faces renewed downside pressure. The SOPR is currently at 1.01, indicating a potential turning point for the asset.
In bull markets, SOPR dips below 1, signaling the exhaustion of sellers and a possible rebound. However, in bear markets, rejections at or above 1 usually lead to further declines. This trend is concerning for Bitcoin’s short-term outlook.
NUPL Near Zero Signals Potential Bitcoin Liquidations
The Short-Term Holder Net Unrealized Profit/Loss (NUPL) is nearing zero, raising the risk of liquidations. Newer Bitcoin holders may quickly cut their losses, adding further pressure to the market. Glassnode analysts note that unless institutional demand increases, Bitcoin’s risk of deeper cooling remains high.
Despite these warning signs, some remain optimistic about Bitcoin’s future. 10x Research’s Markus Thielen noted that the price could face more stop-loss selling.
“The market is positioned for a Q4 rally, making a correction more likely than a surge,” Thielen said.
