Bitcoin (BTC) can visit the zone below $88,000 before resuming its push towards the $100,000 threshold if further downside is registered, according to a Glassnode report.
The report highlighted a critical “air gap,” as BTC’s rapid rally has left minimal trading activity between $76,000 and $88,000, creating an underdeveloped price range that could draw market focus if the current pullback persists.
However, this price action is natural in price discovery phases, which often involve cycles of rallies, corrections, and consolidations to establish stable price ranges. Observing supply distribution during price discovery phases is fundamental to revealing supply and demand zones that could affect Bitcoin’s trajectory.
As Bitcoin navigates price discovery territory, the report emphasized the role of LTHs in returning previously dormant supply to liquid circulation. While the $100,000 milestone remains within reach, the market may require a re-accumulation phase to digest profit-taking pressures and sustain upward momentum fully.
Parallels with March
The current rally mirrors patterns seen during the March rally when significant supply re-accumulation at lower levels supported Bitcoin’s ascent to a new high.
A key driver of Bitcoin’s price action has been the behavior of Long-Term Holders (LTHs), who have realized record profits amid increased liquidity. Since September, this cohort has distributed approximately 507,000 BTC, with profit-taking rates surpassing those observed during March.
Glassnode’s LTH Liveliness metric indicates heightened spending activity, signaling that most distributed coins were acquired relatively recently rather than being held for years.
LTHs are currently realizing $2.02 billion in daily profits, a new record, and robust demand must occur to absorb the supply redistribution.
Moreover, the report warns of the necessity of further consolidation to maintain equilibrium in the market.
Sell-side forces
The Sell-Side Risk Ratio, which measures realized profit and loss volumes against the market’s size, is nearing high-value territory, indicating intensified profit-taking.
However, the report noted that the current ratio is still below peaks in prior bull markets, suggesting that demand remains resilient enough to absorb the selling pressure.
Analyzing the composition of the supply sold, the document revealed that coins aged 6 months to 1 year dominate current sell-side pressure, accounting for 35.3% of total realized profit.
These coins, likely accumulated after exchange-traded fund (ETF) launches, suggest investors use a “swing-trade” strategy to capitalize on recent market momentum.
Additionally, profit-taking is uniform across various return brackets, with realized gains ranging from $7.2 billion to $13.1 billion across different percentage groups. This consistency highlights a strategic “chips-off-the-table” approach, where investors with lower cost bases secure profits while maintaining long-term exposure.
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