TLDR
- Bitcoin price dropped to four-week low of $108,700, breaking below $112,000 support
- Long-term holders realized 3.4 million Bitcoin in profits while ETF inflows declined
- Market data shows exhaustion signs with profit-taking reaching previous cycle peak levels
- $1.5 billion in liquidations hit cryptocurrency exchanges during recent sell-off
- SOPR indicator at 1.01 suggests some holders now selling Bitcoin at losses
Bitcoin price has declined to its lowest level in four weeks as market indicators suggest the current rally may be losing momentum. The leading cryptocurrency fell to $108,700 on Coinbase during Thursday trading sessions.
The Bitcoin price decline occurred after failing to maintain support above the crucial $112,000 level. This marks the first time Bitcoin has approached these price levels since early September.
Data from Glassnode reveals long-term Bitcoin holders have realized profits on 3.4 million Bitcoin. This substantial profit-taking activity coincides with declining inflows into Bitcoin exchange-traded funds.
The combination of large-scale profit realization and reduced institutional investment indicates market exhaustion following the Federal Reserve’s recent interest rate cut. Market participants appear to be securing profits rather than accumulating additional Bitcoin positions.
Bitcoin Price Faces Cycle Peak Profit-Taking
Bitcoin price analysis shows the realized profit/loss ratio has exceeded 90% of moved coins three separate times during this market cycle. Glassnode data indicates the market recently stepped back from the third extreme reading.
Historical data shows these profit-taking peaks have marked major cycle tops in previous Bitcoin market cycles. Current probabilities favor a cooling phase for Bitcoin price action ahead.
The Spent Output Profit Ratio currently measures 1.01, indicating some Bitcoin holders are beginning to sell at losses. This metric typically signals market stress when approaching or falling below 1.0 during bull market conditions.
Short-Term Holder Net Unrealized Profit/Loss is approaching zero levels. This threatens to trigger additional liquidations as newer Bitcoin holders may quickly reduce their positions.
Earlier this week, liquidations totaled approximately $1.5 billion in long positions across major cryptocurrency exchanges. Market reports indicate thin liquidity conditions and heavy leveraged positions worsened the sell-off impact.
Economic Factors Impact Bitcoin Price Sentiment
U.S. economic data has contributed to cautious sentiment affecting Bitcoin price action. Second quarter economic expansion reached 3.8% annualized pace, exceeding initial 3.3% estimates.
However, economists project growth will slow to approximately 1.5% for the full year. Trade policy uncertainty continues weighing on future economic projections.
Federal Reserve Chair Jerome Powell emphasized there was “no risk-free path” in monetary policy decisions this week. Powell warned that rapid easing could increase inflation while slow action might harm employment growth.
Additional Fed officials reinforced cautious policy approaches in separate statements. They stressed future monetary easing decisions will depend heavily on incoming economic data.
The August personal consumption expenditures price index report releases Friday. Core inflation forecasts show 2.9% year-over-year readings, remaining above the Fed’s 2% target rate.
Bitcoin price was trading at $109,645 at publication time, representing a 6.5% decline over the previous week.
