Bitcoin Faces Deeper Correction as Profit-Taking Signals Market Exhaustion

Bitcoin price latest slide is raising concerns among analysts that the world’s largest cryptocurrency may be entering a more pronounced cooling phase. Onchain data shows long-term holders have realized profits at levels previously associated with market cycle peaks, while institutional inflows appear to be slowing.

According to Glassnode, long-term investors have booked profits on 3.4 million Bitcoin, a surge that mirrors past tops. At the same time, exchange-traded fund (ETF) inflows have lost momentum following the Federal Reserve’s recent interest rate cut, a sign of possible market fatigue.

Key Support Levels Under Pressure

Bitcoin has already broken through critical technical levels, dropping below $112,000 and touching a four-week low of $108,700 on Coinbase late Thursday, according to TradingView. Although it has not yet retested the September 1 low of $107,500, analysts warn that the price is hovering dangerously close to that mark.

“The bounce from early September quickly lost steam, and with prices now hovering near this level again, another wave of stop-loss selling could emerge,” noted Markus Thielen, head of 10x Research. He added that many traders were positioned for a strong fourth-quarter rally, making a surprise correction more likely than a sudden surge higher.

Cooling Phase for Bitcoin Ahead?

Glassnode’s data shows that the realized profit/loss ratio has exceeded 90% of coins moved three times in the current cycle, a pattern that historically aligns with major market tops. “Probabilities favor a cooling phase ahead,” the firm stated in its report.

Other key indicators are flashing caution as well. The Spent Output Profit Ratio (SOPR)—which measures whether coins are sold at a profit or loss—has edged down to 1.01. This suggests that some holders are beginning to sell at a loss. 

In bull markets, SOPR dips below 1 can signal a rebound, but during bearish periods, repeated rejections near 1 often indicate renewed downside pressure.

Meanwhile, the Short-Term Holder Net Unrealized Profit/Loss (NUPL) is nearing zero, a level that can trigger liquidations as newer investors rush to cut their losses. Glassnode analysts warned that unless institutional demand returns, the risk of a “deeper cooling” remains high.

At the time of writing, Bitcoin was trading around $109,645, down about 6.5% over the past week. While MicroStrategy’s Michael Saylor remains optimistic about a fourth-quarter recovery, Thielen said his firm is staying neutral “unless Bitcoin can reclaim $115,000.”