Author: Glassnode
Compilation: Felix, PANews
Bitcoin began to retrace after touching a new high of $111,800 as long-term holders started taking profits. Key support levels are at $103,700 and $95,600, and with signs of long-term investors selling, bulls are currently facing a severe test.
Key points:
Bitcoin reached a high of $111,800 but quickly retreated to $103,200. The initial surge appeared to be driven by the spot market, with major absorption areas of $81,000 to $85,000, $93,000 to $96,000, and $102,000 to $104,000 now serving as potential support levels.
From a more macro perspective, the CBD heatmap shows that many historical absorption zones have turned into selling zones. Sellers from the $25,000 to $31,000, $38,000 to $44,000, and $60,000 to $73,000 ranges are putting pressure on price action.
Cost basis quantiles and short-term holder ranges suggest near-term support around $103,700 and $95,600, with resistance at $114,800. These levels are important statistical indicators of a broader shift in market sentiment.
Realized profits soared to $1.47 billion/day, marking the fifth major profit-taking event in this cycle. The sell-off is mainly led by long-term holders, not short-term traders.
The group holding positions for more than 1 year dominates recent sell-offs, reflecting mature capital rotation. This is consistent with previous observations from the CBD heatmap, confirming that experienced investors are shaping the current top formation phase.
Rally Staircase
Over the past two weeks, Bitcoin has continued its rally, reaching a new high of $111,800 and briefly surpassing the high set in January 2025. However, the subsequent pullback to $103,200 suggests a possible pause in bullish momentum.
To understand the intrinsic structure of this rally, the CBD heatmap (PANews note: The CBD heatmap displays Cumulative Volume Delta data in the form of a heatmap) can be used to track the net difference between aggressive buying and selling at different price levels. Visually, it reveals areas of concentrated accumulation or selling driven by spot markets, helping to identify price ranges with the strongest demand.
From the heatmap, this rally was primarily spot-driven and rose in a stepwise manner, with clear accumulation areas in the $81,000 to $85,000, $93,000 to $96,000, and $102,000 to $104,000 ranges. These areas now have the potential to become supply-intensive zones, which, under the influence of overall market sentiment, may act as short-term support.
It's worth noting that top buyers in the first quarter of this year have been holding since prices dipped below $80,000, and they are now facing another test as prices hover around $110,000. This article will explore the gradually weakening momentum behind recent demand, the factors undermining market strength, and where potential support levels may lie if the market continues to weaken.
Source: Glassnode
Long-Term Holder Selling Pressure
To understand the drivers behind Bitcoin's recent break above $111,000, it is necessary to examine it from the perspective of the broader market structure. By viewing the heatmap since the cycle bottom in June 2022, the distribution pattern of past accumulations becomes clear.
As prices continue to rise, supply-intensive zones that previously served as accumulation bases (often characterized by sideways consolidation) have now turned into active selling zones. Visually, the heatmap shows a gradual shift; areas that once supported the upward movement have turned into resistance levels as early holders take the opportunity to sell.
The most significant selling pressure comes from groups that accumulated positions in key historical ranges ($25,000 to $31,000 and $60,000 to $73,000). Many of these groups have experienced multiple volatile phases and are now exacerbating supply overhang, seemingly limiting further gains in Bitcoin, at least in the short term.
Source: Glassnode
Exploration of price discovery
As long-term holders gradually exert selling pressure, the likelihood of a short-term correction continues to increase, especially in the absence of strong catalysts to push Bitcoin firmly above $111,800. In this phase of stalled bullish momentum, on-chain pricing models become important tools for identifying potential support levels during pullbacks.
A particularly effective framework is the Spent Supply Distribution (SSD) quantile. This metric analyzes the cost basis of tokens at a specific time, dividing it into 100 percentiles. It provides a high-resolution view of where supply initially entered the market, allowing for the identification of areas with higher turnover rates, which may be driven by profit-taking or loss realization.
The focus here is on three key quantiles:
? 0.95 (top 5%)
? 0.85 (top 15%)
? 0.75 (top 25%)
Historical patterns over the past five years suggest that absolute euphoria often occurs when the price is above the 0.95 quantile, while sideways bull market phases typically occur between 0.85 and 0.95. On the other hand, sustained levels below 0.75 usually mark bear markets or risk-off periods.
Currently, the 0.95 quantile is around $103,700, which is the first on-chain support level. If selling pressure persists, the next level to watch is the 0.85 quantile at $95,600, which may provide structural support, or, if broken, confirm a broader risk reset.
Source: Glassnode
Tracking the behavior of recent investors is becoming increasingly important, as Bitcoin's supply has changed hands significantly over the past six months, driven by two new all-time highs. One of the most insightful models is the short-term holder (STH) cost basis, which reflects the average purchase price of Bitcoin held for less than 155 days.
To refine the statistics, 'standard deviation bands' are applied to this cost basis to define key support and resistance areas. These standard deviation bands help quantify the range of short-term participant market consensus and may foreshadow trend exhaustion or breakout thresholds.
Currently, the STH cost basis is $97,100, representing the average purchase price of recent buyers. +1 is generally associated with overbought or bullish breakout conditions, and its location is at $114,800, while -1 is located at $83,200, marking an increase in downside risk.
These three levels ($114,800, $97,100, and $83,200) now define the statistical boundaries of short-term market sentiment. A break above or below these thresholds is likely to determine the market's next move, indicating whether momentum is strengthening or waning.
Source: Glassnode
Profit Taking
As Bitcoin retreated from its recent high of $111,800, much of the selling pressure appears to be coming from experienced holders within the cycle, i.e., those who accumulated Bitcoin in the early stages of the rally and are now realizing significant gains. In this phase, the profit-taking mechanism is a key factor in assessing the risk of demand exhaustion.
By calculating the 7-day simple moving average of daily profit realization (adjusted to exclude entity-internal flows), daily realized profits reached a peak of $1.47 billion last week. This is a significant level that highlights the intensity of recent capital rotation.
More importantly, this marks the fifth time in this cycle that daily profit-taking has exceeded $1 billion. Such events often coincide with local market tops or slowdowns, especially when new demand cannot absorb such a large amount of realized gains. This highlights the market's resilience in the face of significant selling pressure.
Source: Glassnode
Dynamic Transformation
To better understand the significance of the current wave of profit-taking, it is necessary to examine it from a cyclical perspective. Not all profit-taking events are the same, and the dynamic nature of these mechanisms can reveal how market maturity and volatility shape investor behavior over time.
An effective approach is to examine the 90-day simple moving average (SMA) of net realized profit adjusted for market capitalization. This adjustment allows for comparisons across different cycles. One clear trend is that the enthusiasm for profit-taking has waned over time, reflecting the general degradation of cyclical upward performance and a reduction in volatility as the market matures.
From November 2015 to April 2018, the net profit-taking phase lasted approximately 25 months, peaking at over 0.4% of market capitalization.
In the 2020-2022 cycle, this area lasted approximately 20 months, but peaked at only around 0.15%.
In the current cycle, which began in November 2023, the net profit-taking phase has lasted 18 months, forming two distinct peaks close to 0.1%.
This trend suggests that although profit-taking is still exerting significant pressure, it has been easing, which may foreshadow a shift from boom-and-bust euphoria to structural capital rotation in a more mature asset class.
Source: Glassnode
Who is profiting?
Another perspective on assessing profit-taking cycles is to identify which investor groups are selling.
Since the 2015-2018 cycle, the share of profits realized by long-term holders (LTHs) has steadily increased at the top of market euphoria. This trend highlights a structural shift in market maturity, with more experienced investors dominating capital rotation rather than quick-in, quick-out speculators.
During the recent peak, the 30-day moving average of realized profits for long-term holders (LTHs) soared to approximately $1 billion per day, while short-term holders (STHs) realized only $320 million per day, a difference of more than 3 times, further confirming that this round of profit-taking is dominated by investors with longer holding periods and stronger conviction.
Source: Glassnode
At first glance, the current $1 billion per day in realized profits from long-term holders (held for over 6 months) seems dwarfed by the $1.8 billion peak in December 2024. However, a deeper analysis reveals a familiar pattern.
In previous bull markets, as the cycle progresses, the group of investors holding for 6 to 12 months tends to contribute less to profit-taking. This dynamic is emerging again in the current cycle. As the rally continues, more experienced investors among long-term holders are becoming the main sellers, which seems to be shaping the top formation phase of this cycle.
Source: Glassnode
Therefore, excluding the 6 to 12-month holding group from the total realized profit of long-term holders provides a more accurate assessment of the true impact of experienced investors on current market dynamics. This adjustment eliminates the influence of buyers at the highs in Q1 2025, who have relatively limited unrealized gains, and focuses on investors who have been holding for more than a year and have higher profit margins.
The significance of the current rally becomes even clearer when isolating the profits realized by investors holding for over 1 year. This group is typically associated with committed investors, and they are now taking profits on a large scale, a behavior that often indicates that a bull market trend has matured or is coming to an end.
This observation is consistent with earlier findings from the heatmap, which also indicated that recent selling pressure mainly came from experienced investors, further confirming the assertion that long-term holders are becoming increasingly active in this top formation phase.
Source: Glassnode
Conclusion
Bitcoin's recent climb to a new high of $111,800 has also met increasing resistance, and market data shows that early buyers are showing signs of fatigue, with long-term holders taking profits. Heatmaps show that several previously strong accumulation zones have turned into active selling zones, especially for investors who bought in the $25,000 to $73,000 range.
On-chain pricing models, such as cost basis quantiles and short-term holder statistical ranges, now define the market's immediate structure. Key support levels at $103,700 and $95,600 will be crucial if demand weakens, while the upside resistance range of $114,800 remains a test for market revival.
Profit-taking mechanisms are also becoming more intense, with daily profit peaks reaching $1.47 billion, mainly led by long-term holders. This trend, coupled with an increased proportion of profit-taking by groups holding for over 1 year, suggests that we may be witnessing a distribution phase rather than a new breakout.
Overall, the market appears to be at a crossroads, influenced by a confluence of factors including increased selling pressure, waning bullish momentum, and the need for demand to prove its resilience. The next few weeks will be critical in determining whether this is a mid-cycle consolidation or the beginning of a broader top formation.
Related reading: On-chain data week review: Bitcoin hit its third new high this cycle and may still have room to rise
