Bitcoin price recovery ahead as selling pressure eases?

Bitcoin’s short-term holders have moved out of a historically strong selling zone, with the share of their holdings sitting in profit falling to roughly 70% from nearly 100% in late September, according to Glassnode.

In an October 27 market update, blockchain analytics firm Glassnode said the recent decline in profitability has made Bitcoin a considerably better entry point than it was a month ago for investors expecting the cryptocurrency’s uptrend to continue.

The firm’s latest chart shows that the percentage of short-term holder supply in profit has dropped below a threshold that has historically been associated with increased selling activity.

Short-term holders are generally classified as investors who have held Bitcoin for less than 155 days. Their profitability is closely watched because recent buyers tend to react more quickly to price movements and may sell when their holdings generate substantial gains.

In late September, almost all Bitcoin held by this group was profitable, giving investors an opportunity to lock in gains as prices recovered. However, the subsequent correction has reduced the proportion of coins trading above their acquisition prices.

Glassnode’s assessment suggests that recent buyers now have less unrealized profit available to take, although the firm did not suggest that Bitcoin was guaranteed to recover from current levels.

Bitcoin profit taking has slowed since September

The latest reading follows a period of increased selling activity among recent Bitcoin buyers, particularly during the cryptocurrency’s attempt to recover above $85,000 earlier this month.

In its October 7 market report, Glassnode found that short-term holders selling at a profit accounted for approximately 86% of all Bitcoin sent to exchanges on October 4, the highest proportion recorded in a year.

Bitcoin had just closed above $85,000 for the first time during that recovery, prompting some investors who purchased coins in previous months to realize their gains.

However, selling activity has since cooled considerably.

Glassnode’s October 21 Week On-Chain report found that realized profit taking had fallen to roughly half the level recorded during the week of Bitcoin’s September high.

Realized losses, meanwhile, remained relatively stable, with the largest losses during the preceding week occurring as Bitcoin approached $80,000 on October 15.

The firm found that selling among investors who acquired Bitcoin one to two years earlier had slowed as well, with the group moving less than one-third as many coins daily compared with its early October peak.

Bitcoin price faces resistance near $87,500

Despite the improvement in short-term holder profitability, Bitcoin continues to face selling pressure at higher price levels.

Glassnode’s October 21 analysis identified a major resistance region between $85,000 and $87,500, where several important market indicators were concentrated.

Investors who purchased Bitcoin six to twelve months earlier held an average acquisition price near $86,700, while exchange sell orders were clustered between approximately $86,500 and $87,500.

Large liquidation clusters were concentrated near $85,000 and $87,000, potentially adding volatility if Bitcoin attempts another recovery.

On the downside, the analytics firm identified buying interest around $80,000 after Bitcoin briefly approached that level on October 15.

The region was particularly important because the estimated average acquisition prices of US spot Bitcoin ETF investors and corporate treasury holders were concentrated between $80,000 and $81,500.

However, Bitcoin has since struggled to maintain that support.

As previously reported by crypto.news, Bitcoin slipped below $80,000 on October 26, reaching an intraday low near $79,332 as leveraged liquidations and renewed ETF withdrawals weighed on prices.

Glassnode’s True Market Mean, which estimates the average acquisition price of economically active Bitcoin supply, stood near $77,600 in its October 21 assessment.

Bitcoin ETF flows remain uneven ahead of Fed decision

Institutional demand has been another area of concern as Bitcoin struggles to regain momentum.

US spot Bitcoin ETFs recorded substantial inflows earlier in October, including a strong buying session on October 19. However, the recovery in demand proved uneven.

According to recent Bitcoin ETF flow data, the funds attracted $524.8 million on October 21 before recording $635.6 million in withdrawals the following day.

Another $137.9 million left the funds on October 23, bringing combined outflows across the two sessions to $773.5 million.

Despite the withdrawals, the ETFs finished the five-session period with approximately $301.2 million in net inflows.

Meanwhile, Bitcoin’s decline below $80,000 has brought attention to the Federal Reserve’s upcoming interest rate decision on October 28.

The central bank is scheduled to announce its decision following a two-day policy meeting, with investors watching for signals about the direction of interest rates.

September’s Personal Consumption Expenditures inflation report is scheduled for October 29, followed by a major Bitcoin options expiry on October 30.