Profit-taking by long-term holders and slowing ETF inflows raise correction risks
Bitcoin has fallen to a four-week low, with analysts warning that signs of “exhaustion” could point to a deeper correction ahead. The drop comes as long-term holders realized 3.4 million BTC in profits and institutional inflows into spot exchange-traded funds slowed, according to on-chain analytics firm Glassnode.
Long-term holders take profits
Bitcoin slid to $108,700 on Thursday, breaking key support around $112,000. The move follows heavy profit-taking from long-term investors, an indicator often seen near cycle peaks. Glassnode noted that the realized profit/loss ratio has now reached levels historically aligned with major market tops.
“Probabilities favor a cooling phase ahead,” Glassnode wrote, highlighting that realized profits above 90% of moved coins have occurred three times in the current cycle — each followed by corrections.
Market analysts warn that another wave of selling could emerge. Markus Thielen, head of 10x Research, said, “The bounce from early September quickly lost momentum. With prices hovering near support again, stop-loss selling could accelerate.”
This shift comes at a time when many traders had positioned for a strong Q4 rally, raising the risk that the surprise may be to the downside rather than an upside surge.
SOPR and NUPL show stress
Further on-chain signals add to bearish concerns. The Spent Output Profit Ratio (SOPR), which measures whether coins are sold in profit or loss, is at 1.01 — suggesting some holders are starting to sell at a loss. Historically, this pattern has marked moments of market stress and downside continuation.
Meanwhile, the Short-Term Holder Net Unrealized Profit/Loss (NUPL) is trending toward zero. If breached, it could trigger liquidations as newer investors quickly cut their exposure.
Unless institutional demand and retail inflows return, the risk of a deeper cooling phase remains elevated, Glassnode analysts concluded. Thielen said Bitcoin must reclaim $115,000 to restore momentum, while MicroStrategy chair Michael Saylor remained optimistic, forecasting gains later in Q4 as macro pressures ease.
At the time of writing, Bitcoin traded at $109,645, down 6.5% over the past week.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.