Bitcoin Plunges to 4-Week Low Amid Profit-Taking Frenzy and Sluggish Demand

Bitcoin just hit its lowest level in a month as traders cash in gains and institutional interest falters.

Market Pressure Mounts

The cryptocurrency bled value for the third consecutive session—down 12% from recent highs as whales dump positions and retail investors stay sidelined. Trading volumes slumped 30% below the monthly average, signaling weakening momentum across major exchanges.

Technical Breakdown

BTC shattered key support at the $58K level that had held firm since August's rally. The move triggers stop-loss orders and fuels further downward spiral—classic crypto volatility that'd give traditional finance analysts heart palpitations. Meanwhile, derivatives data shows long positions getting liquidated at the highest rate since July's regulatory scare.

Institutional Indifference

Spot ETF inflows slowed to a trickle this week, with daily subscriptions dropping to just $15 million compared to September's $200-million averages. The 'weak hands' are getting shaken out while Wall Street takes an extended lunch break—because nothing says 'digital gold' like 9% daily swings that make oil traders blush.

Long-term holders turn to profit-taking

According to the crypto market analytics firm, long-term bitcoin holders have realized around 3.4 million BTC in profits. At the same time, short-term investors are struggling to keep Bitcoin upwards of a critical cost basis near $110,000, and a sustained break below this threshold could accelerate losses.

Glassnode noted that long-term holder distribution surged around the FOMC decision, with 122,000 BTC being sold monthly. Exchange-traded funds (ETFs) net inflows collapsed from 2,600 BTC per day to almost zero on a seven-day average basis. 

The analysts said the combination of rising sell pressure and fading institutional demand created a vulnerable backdrop for bitcoin.

Glassnode researchers compared current conditions to the steady advance seen in 2015–2017, though they did not include a final surge phase that characterized that period. If $124,000 proves to be the global top, this cycle has so far lasted 1,030 days. That figure closely matches the roughly 1,060-day lengths of the previous two market cycles.

Stop-loss selling could take Bitcoin further into the red-zone

Bitcoin sentiment all round the market seems mostly “gloomy,” as more analysis points to further downside risks. Markus Thielen, head of research at 10x Research, said the coin’s rebound from early September lows “quickly lost momentum.” 

At the time of this publication, BTC prices are hovering NEAR those levels again, and according to Thielen, another spree of stop-loss selling is coming.

According to Glassnode’s data, the cumulative value of capital absorbed into bitcoin, known as “Realized Cap,” has risen in three distinct waves since November 2022 and now stands at $1.06 trillion.

Realized cap growth in previous cycles was recorded as $4.2 billion between 2011–2015, $85 billion between 2015–2018, and $383 billion between 2018–2022. The current cycle has seen $678 billion in net inflows, nearly 1.8 times the prior cycle.

Unlike earlier phases, where single prolonged waves dominated, this cycle has produced three separate multi-month surges. Each has coincided with heavy profit-taking, with more than 90% of moved coins sold at a profit. 

Per Glassnode’s insight, there is a pattern of cyclical peaks seen in a market stepping back from its third such extreme, which is raising the likelihood of a prolonged cooling phase.

Volatile trading week sends US Dollar upwards 

Bitcoin’s woes began on Monday when prices dropped from $115,500 to $112,000. Although the market recovered some ground mid-week, another selloff on Thursday drove BTC down to $108,600 on Bitstamp.

As expected, gold advocate and long-time bitcoin skeptic Peter Schiff jabbed the crypto community, saying the drop was the “start of a bear market.” 

Bitcoin is not living up to its hype. Priced in gold, Bitcoin is now 20% below its record high set in August. In other words, Bitcoin is in a bear market. Since Bitcoin is promoted as being digital gold, being down 20% in Gold is more significant than being down 10% in dollars.

Spot gold slipped 0.2% to $3,741.21 per ounce by early Friday in Asia, even as the metal remained up 1.6% for the week. US gold futures for December delivery were steady at $3,771.30. The dollar index hovered near a three-week high, making gold and other dollar-priced assets more expensive for foreign investors.

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