Bitcoin (BTC) on-chain data reveals structural concerns about the sustainability of current gatherings, and defending the $111,000 zone is fundamental to avoiding any further downsides.
As GlassNode reported on September 25th, the setback from nearly $117,000 following the Federal Reserve fee decision reflects the textbook “buy rumors and sell news” pattern.
Bitcoin’s all-time high of $124,000 to $111,012 presents a decline of just 10.5% compared to the previous 28% correction of the cycle or a 60% drop seen in the previous bull market.
However, the report noted that this surface level stability masks market fatigue, which requires careful attention.
On-chain metrics draw pictures of capital flow dynamics. This cycle has absorbed a net inflow of $678 billion through realized cap growth.
Long-term holders have distributed 3.4 million BTC to profits, already surpassing previous cycles, highlighting the magnitude of sales pressure from seasoned investors. The market structure reveals a fragile balance between institutional demand and long-term holder distribution.
The US trading Bitcoin spot ETF influx, which previously absorbed massive sales, collapsed to near zero around the FOMC meeting from 2,600 BTC per day.
Meanwhile, the distribution of long-term holders surged to 122,000 BTC per month, creating an imbalance that sets a stage of debilitating.
The derivatives market has amplified the corrections through forced liquidation and derevalization. With Bitcoin falling below $113,000, open interest on futures fell sharply from $44.8 billion to $42.7 billion, with an aggressive liquidation cluster of $114,000-$112,000 being actively sold.
This derevalization reset cleared excessive leverage, but also revealed market vulnerabilities to liquidity-driven swings.
The options market reflects growing concerns about a decline as the revised Put/Call Skew spikes have been spiked from 1.5% to 17%.
The best option of all time closes to the highest ever highs, creating gamma overhangs that amplify volatility, especially on the drawbacks of dealers being placed in short gamma.
As Bitcoin is currently trading at $109,466, the $111,800 level represents a short-term holder cost base and served as temporary support during recent sales.
This technical foundation becomes important as the market navigates between institutional accumulation and long-term benefits from holders.
Bitcoin’s ability to maintain the threshold determines whether this modification represents healthy integration or the onset of a deeper cooling trend.
If the institutional demand to offset the ongoing long-term ownership distribution is not updated, the risk of a larger price drop is significantly increased.
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