Bitcoin has faced a sharp correction, slipping 14% from its recent all-time high of $124,500 to a seven-week low of $107,400 on Saturday. The decline has cooled what analysts describe as the “euphoric phase” of the market, with widespread net distribution replacing the bullish momentum. Market intelligence firm Glassnode said the drop signals “exhaustion” in demand following months of strong inflows that pushed all Bitcoin supply into profit by mid-August. Cooling After Euphoric Rally The euphoric phase lasted around three and a half months, with over 95% of the Bitcoin supply in profit. Glassnode explained that sustaining such conditions typically requires constant capital inflows, which rarely hold over extended periods. “This behaviour is often captured by the 0.95 quantile cost basis, the threshold above which 95% of supply is in profit,” the firm said. By August 19, Bitcoin slipped back under this level, a sign that buyers had begun to tire. Currently, 90% of Bitcoin supply remains in profit, within the $104,100–$114,300 range. Glassnode noted: “Breaking below $104.1K would replay the post-ATH exhaustion phases seen earlier in this cycle, whereas a recovery above $114.3K would signal demand finding its footing and reclaiming control of the trend.” Short-Term Holders Under Pressure The correction has hit short-term holders hardest, with the percentage of supply in profit plunging from above 90% to just 42%. “Such sharp reversals typically provoke fear-driven selling from top buyers, which is then often followed by exhaustion of the very same sellers,” Glassnode said. A rebound in price to $112,000 helped lift more than 60% of short-term holder supply back into profit, but analysts warn this remains fragile. “Only a sustained recovery above $114K–$116K, where over 75% of short-term holder supply would return to profit, could provide the confidence necessary to attract new demand and fuel the next leg higher,” the firm added. Resistance Levels in Focus Bitcoin has repeatedly struggled to break past $112,000, showing stiff resistance around the $111,700–$115,500 range. This zone coincides with the 50-day and 100-day simple moving averages, making it a crucial battleground for bulls and bears. Trader Daan Crypto Trades observed: “Bitcoin has been consolidating below its previous local range and has failed to retake it. A move back above $112K and holding there would be good in the short term.” The 20-day exponential moving average, sitting near $112,438, presents another obstacle. Overcoming these levels could confirm higher lows and potentially set the stage for a renewed attempt at all-time highs.
