Bitcoin is exhibiting fatigue that often foreshadows major directional shifts.
On October 15, traders realized $1.8 billion in profits, marking one of the most significant cash-out days since the summer began.
The same day saw an additional $430 million in realized losses flooding the market, affirming the widespread sentiment since last weekend’s crash: momentum is faltering, with much capital seeking the exits.
Currently, Bitcoin stands below $110,000, having dropped over 10% since the start of October. Most of this decline isn’t gradual; rather, it’s the swift exit of early 2025 investors who had held onto their assets.
Long-term holders (those holding coins for over three months) accounted for a significant portion of the sales, realizing over six times the profits compared to short-term holders.
Given that long-term holders remain well in the green despite last week’s crash, it’s reasonable to conclude they aren’t panicking. Instead, they are strategically taking profits amidst weakness rather than waiting for a rebound.
Some level of profit-taking is typical after a phase of consolidation. While a few days of billions in profit-taking could be viewed as healthy rotation, a continuous flow—as observed since the month started—starts feeling more like exhaustion than distribution.
The realized loss figures are rising as well. Although still within manageable limits, they have been increasing along with profits. If realized losses keep climbing parallel to profits, this could suggest that the de-risking is permeating from short-term holders to the broader market.
This situation could become quite infectious, especially since half of Bitcoin’s short-term holders are in loss territory. Data from Checkonchain indicates that unrealized losses make up about 2% of the market cap—small but rapidly escalating.
A drop below $100,000 could quickly elevate that figure to 5%, turning current unease into overwhelming fear.
Historically, only during severe bear markets has over 30% of the supply been in loss, and we are perilously close to that mark.
Should buyers succeed in defending the $100,000 mark, Bitcoin could reset its short-term cost basis, potentially reigniting bullish momentum.
If it falls below $100,000, the new buyers’ cost basis would plummet, causing the entire short-term supply to shift to a loss position. While this wouldn’t necessarily signal the end of the cycle, it could extend the correction deep into the $80,000 range, representing a roughly 35% decline from the all-time high.
As it stands, Bitcoin remains remarkably stable given the substantial sell-side pressure. However, the message conveyed on the blockchain is crystal clear: conviction is waning.
The bulls are still in defense mode, but with each downward candle, it becomes increasingly difficult to discern whether they are buying dips or merely catching falling knives.
