Key points:
- Bitcoin is in the middle of a textbook correction phase after all-time highs, Glassnode finds.
- For correction to flip to seller exhaustion, BTC price must drop to almost $104,000.
- Short-term holders are seeing significant profit changes within the current BTC price range.
Bitcoin (BTC $112,320) is showing classic “post euphoria consolidation” as new analysis eyes $104,000 next.
In the Sept. 4 edition of its regular newsletter, “The Week Onchain,” crypto analytics firm Glassnode confirmed the new BTC price “consolidation corridor.
Bitcoin profit “quantiles” in focus
Bitcoin price action continues to unsettle those who feel that the bull run should already be back.
While gold and risk assets head higher, BTC/USD is stuck in a range between 10% and 15% below its most recent all-time high from August.
“Since the mid-August all-time high, Bitcoin has entered a volatile downtrend, declining to $108k before bouncing back toward $112k,” Glassnode summarizes.
With volatility rising, the central question is whether this marks the start of a true bear market or simply a short-term contraction.
To answer that question, researchers looked at the price at which the active BTC supply last moved, dividing it into various “quantiles.”
The 0.95 quantile, which corresponds to the price at which 95% of the supply is in profit, is of particular interest.
“At present, the price trades between the 0.85 and 0.95 quantile cost basis, or in the $104.1k–$114.3k range. Historically, this zone has acted as a consolidation corridor following euphoric peaks, often leading to a choppy sideways market,” The Week Onchain explains.
Therefore, 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.
Bitcoin supply quantiles. Source: Glassnode
Glassnode notes that the trip to August highs marked Bitcoin’s third euphoric uptrend within the current bull market, and that such moves are by definition unsustainable for long periods.
Speculators bounce between black and red
Other key prices on the radar include the aggregate buy-in level for Bitcoin speculators, also known as short-term holders (STHs).
Defined as entities hodling for up to six months, these wallets traditionally prop up price during bull-market corrections.
Glassnode notes, however, that STH profitability changes quickly within the current price range.
“The percentage of short-term holder supply in profit provides a clear lens on this dynamic,” it continues.
With the leg down to $108k, their share in profit collapsed from above 90% to just 42%, a textbook cooling-off from an overheated state to a zone of sudden stress.
Bitcoin STH supply in profit. Source: Glassnode
STHs can react suddenly to their profitability flipping negative, while quickly becoming exhausted from selling at a loss, allowing the market to bounce.
“This pattern explains the recent rebound from $108k back to $112k,” Glassnode adds about the latest BTC price action.