Bitcoin just slipped below the average price paid by recent buyers while long-term holders quietly accelerated profit-taking to over 22,000 BTC/day. That combination has flipped the tape from euphoria to demand exhaustion—and it’s the kind of reset that often decides who keeps their edge and who gets chopped in consolidation.

What’s Happening

Glassnode data shows price is under the short-term holder (STH) cost basis near $113k–$114k—a level that typically acts as psychological and technical support in bull phases. Price is also battling the 0.85 quantile (~$108.6k), with the next major threshold at the 0.75 quantile (~$97.5k). Meanwhile, long-term holders (LTHs) have doubled their daily distribution since July, selling into strength—classic late-cycle behavior.

Why It Matters to Traders

When price lives below key cost-basis bands, more supply flips into unrealized loss, morale weakens, liquidity thins, and emotional selling risk rises. Add tighter macro liquidity—rising Treasury yields and a cautious Fed—and rallies face persistent supply from profit-takers. This doesn’t scream bear market; it signals a digestion phase: slower upside, more mean reversion, and sharper intraday traps.

Levels That Decide the Next Move

- $113k–$114k: Bull/bear pivot. Sustained reclaim with rising spot demand = constructive. - $108.6k (0.85q): Lose it, and more coins go underwater, raising liquidation risk. - $97.5k (0.75q): High-probability liquidity magnet if momentum turns decisively risk-off.

Flow of Coins: Who’s Selling?

LTH distribution above 22k BTC/day is a headwind. Historically (2017, 2021), these waves preceded multi-week to multi-month ranges until supply absorption stabilized. Watch for LTH sell flow to slow—that’s often when the next sustainable impulse can start.

Macro Crosswinds

Higher real yields and tighter financial conditions reduce risk appetite. Institutions trimming BTC hedges amid broader volatility lowers marginal bid strength. Until liquidity improves, expect smaller upside follow-through and faster pullbacks.

Actionable Playbook

• Define the pivot: Treat $113k–$114k as your validation line. Only add trend exposure on a reclaim with rising spot volume and declining perp funding.
• Let price come to you: Ladder bids in the $108.6k → $97.5k zone; avoid chasing wicks.
• Favor spot over leverage: In digestion phases, reduce leverage, shorten holding periods, and fade extremes rather than “diamond-handing” momentum.
• Hedge cleanly: Consider put spreads or collars into key CPI/Fed dates; reassess after prints.
• Monitor supply signals: Track STH/LTH cost basis, realized profit/loss (SOPR), and net exchange flows for signs of distribution slowing.

Risk Management

- If $108.6k breaks on rising volume and open interest, expect deeper liquidity hunts; tighten stops or cut risk. - If price reclaims $113k–$114k and holds 2–3 sessions with spot-led buying, step back in incrementally—don’t re-risk all at once. - Avoid sizing around headlines; anchor decisions to levels and flows.

Bottom Line

This looks like a necessary reset, not a collapse. The path of least resistance near-term is chop with downside tests while LTH supply clears. Patience around $108.6k and $97.5k, plus discipline on the $113k–$114k reclaim, can turn this cooling phase into opportunity rather than drawdown.

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