Bitcoin’s recent rally that peaked near $117,000 following the Federal Reserve’s policy update has lost steam, with the market now entering a correction phase.
According to Glassnode, the movement resembles a classic “buy the rumour, sell the news” pattern. Long-term holders have realized 3.4 million BTC in profit, while ETF inflows that previously helped balance distribution have slowed almost to zero.
From a technical perspective, the decline from the $124,000 all-time high to $113,700 represents an 8% drawdown. This is modest when compared with past cycles, which saw falls of up to 60%.
The structure still mirrors the steady advance seen in 2015–2017, though without a late-stage parabolic rally. Analysts note that if $124,000 proves to be the peak, this cycle’s length of roughly 1,030 days aligns closely with the 1,060-day spans of the prior two cycles.
Beyond price action, inflows remain a key metric. Realized Capital, which tracks the total investment used to absorb older supply, has reached $1.06 trillion.
That includes three distinct spikes in demand since November 2022. The round has already consumed $678 billion in new capital, nearly 1.8 times larger than the last.
Profit-taking has gained momentum as well. Over 90% of the relocated coins had profits on them each time, and local tops ensued. With long-term holders having already outpaced earlier cycles in distribution, pressure upon price has intensified.
The Glassnode report states that profit-waves have been less large yet more regular this time, as evidence of a maturing marketplace.
Non-chain markets have also been volatile. Spot selling saw explosive growth going into the date of the FOMC announcement, leading to involuntary liquidations and transient order books. At the same time, open interest in futures dropped off from $44.8 billion to $42.7 billion as levered longs were cleaned out.
Heatmaps showed massive liquidations between $114,000 and $112,000, highlighting how leverage positions contributed to the decline.
Options markets added one more level of stress. Skew leaped from 1.5% to 17% within several days, reflecting surprising demand for put protection.
Traders relied heavily on puts, driving prices up, and calls became very cheap. With general options open interest near all-time highs, the current gamma environment means modest moves will generate massive reactions, and Bitcoin is vulnerable to further swings until expiry rebalances.
For now, by far the most important support level continues to be the $111,800 short-term holder cost basis. Without a rebound in ETF inflows to counter long-term holder selling, downside risks are in charge.
Also Read: Bitcoin Struggles Below $111,500: Institutional Demand Persists Despite Bearish Outlook
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