Bitcoin (BTC) is currently navigating a challenging phase, attempting to reclaim the $110,000 territory after experiencing a notable downturn that has led to heightened market volatility. This latest pullback, particularly sharp, comes on the heels of the significant liquidation crash on October 10, which forced out excess leverage and introduced one of the year’s most abrupt sell-offs.
Despite this turbulence, Bitcoin remains ensconced within its broader consolidation range. However, the market is poised at a critical juncture where directionality must be resolved soon. Over the next few weeks, factors such as macroeconomic shifts, liquidity trends, and investor positioning will likely dictate the trajectory of price movements.
Recent data from CryptoQuant reveals a significant trend among long-term holders (LTHs), who have been selectively distributing coins since July 1. This strategy has involved selling into strength as Bitcoin approached and subsequently tested its all-time highs, contributing to a subdued upside momentum. Notably, demand has been consistent and robust enough to absorb much of the selling pressure, demonstrating an underlying strength in the market.
Bitcoin Market Dynamics
Analyst Axel Adler points out that Bitcoin is operating in a complex supply-demand environment characterized by persistent profit-taking actions from long-term holders. Since the beginning of July, nearly 810,000 BTC have been offloaded by LTHs, reducing their total holdings from 15.5 million to approximately 14.6 million BTC.
This distribution phase ranks among the most significant in the ongoing cycle and serves as a clear signal that seasoned investors are locking in profits following years of accumulation and strategic positioning. The current market dynamics are particularly notable as Bitcoin has achieved fresh all-time highs during this distribution period, underscoring that demand remains sufficiently strong to absorb the substantial supply being sold.
Historically, such phases of LTH distribution tend to intersect with major cycle inflection points, typically reflecting a shift of capital from early investors to newer market participants. Adler also stresses that while demand is robust, the ongoing supply pressure constrains explosive upward momentum. As long as LTHs continue to cash in their profits, the path to higher prices is likely to remain gradual and filled with volatility rather than explosive spikes.
The crux of the situation is this: Bitcoin faces no shortage of demand; rather, any price advancement will rely on how quickly the supply from long-term holders slows down. Should that occur due to market exhaustion or favorable macro trends, the potential for substantial upside could be unlocked. Until then, price action appears likely to remain range-bound, with any upward movements facing resistance as supply transitions to new hands.
Bitcoin’s Support Levels in Focus
At present, Bitcoin is trading around $109,900 after a recent downturn that saw the price approach the 200-day moving average, a critical long-term support level near $108,000. This area has become the defensive boundary for bulls, establishing the lower boundary of Bitcoin’s current consolidation range. Each time BTC has approached this support zone in recent weeks, buyers have stepped in, indicating persistent demand amid short-term market challenges.
However, reclaiming lost momentum presents its challenges. Bitcoin continues to struggle below the conflated resistance posed by the 50-day and 100-day moving averages, currently positioned between $112,000 and $114,000. To reinstate bullish momentum, a sustained break above this resistance cluster is crucial, setting the stage for another attempt toward the critical $117,500 resistance level, which has repeatedly thwarted upward movements since this summer.
Should Bitcoin fail to maintain the $108,000 support, a deeper correction could be on the horizon, targeting levels between $105,000 and $103,000, where liquidity and previous price reactions converge. For the moment, the technical outlook skews neutral-to-cautious: bulls are successfully holding onto essential support, yet the onus remains on buyers to reclaim the essential moving averages and restore a favorable market structure.
