Bitcoin Profit-Taking Frenzy: 95% of Short-Term Holders Cash Out as Market Overheats
Bitcoin's rally hits a wall as traders rush to lock in gains—classic 'buy the rumor, sell the news' behavior.
Short-term holders are dumping at near-peak profitability, triggering a cascade of sell orders. Sound familiar? It should—Wall Street does the same thing, just with more paperwork and bigger bonuses.
The takeaway? Even in decentralized finance, human psychology remains the ultimate market mover.
- Bitcoin hit a new record at $122.6K, putting all holders in profit.
- Short-term investors are showing signs of selling as profits rise fast.
- The market may be entering a risky zone with rising price pressure.
Bitcoin had been ranging for a long time between $100K and $110K before eventually making a significant movement. It made a new all-time high of $122.6K, according to Glassnode. The $93K–$97K and $104K–$110K ranges were the zones that many investors have entered during the absence of volatility. Now that these areas have become supported, they have attracted even more attention.
By now, the price level is beyond that of $107.4K, where 95% of Bitcoin holders were in profit. The significance of the situation is that it demonstrates to us that soon there will be only a few people left who will not have their profits.
However, it also means that these people are potential sellers. When many are in the situation of having a profit, they tend to sell at once, a factor that pushes the price down or at least makes it rise slowly.
Bitcoin Short-Term Investors Start Taking Profits
We saw a brief spike in the price of bitcoin up to $122.6K, but the virtual coin plunged to $115.9K thereafter. This took place as a great number of short-term holders offloaded their tokens. Essentially, the price had reached the level of market exuberance where the indication of ‘ahead of oneself in the market’ in technical indicators was given.
The short-term Bitcoin supply in the hands of the sellers in the current economic cycle, which is showing a profit of 95%, is something presented by Glassnode as the most key information. This figure normally sits at 88%.
It means that there are indeed new buyers who have come in and are making a lot from it, and these are the same people who WOULD sell in a short time to get the reward. Then, in those three months, it occurred two more times, in July and September, one each, and the effect was the same: the market cooled off.
On the other hand, in the blink of an eye, the Short-Term Holder Unrealized Profit figure hit 15.4% before it declined to 13.6%. The mean and the maximum have been identified, and these numbers represent some of the recent gains that have started to wane. It is also a signal of a soon-over market, one additional thing.
Big Profit-Taking May Slow the Rally
As per Glassnode, short-term holders in profit spent more coins. It means that when the market is rising, people are selling off their stocks. This kind of activity is always a prelude to the drying up of demand.
The Realized Profit to Loss Ratio approached 39.8 as its peak value, which meant that the selloff was very aggressive. But it fell back after that to be 7.3, which, though still high, was not as extreme as before. A rise in this figure will more likely mean that the sales will increase too.
Although Bitcoin is showing strength as of now, indications are that it may be overbought soon. Already, the short-term holders are taking their profit. If the demand does not remain steady, this would be the start of a slowdown in prices or a price drop. In a few weeks, the market will indicate if it still has the power to weather it and whether it needs a period to become less active.
