Bitcoin Faces $111k Impasse: Long-Term Holders Selling Amid Waning Institutional Backing
- Bitcoin faces market exhaustion as Glassnode data shows extreme realized P/L ratios above 10, signaling cyclical peak risks. - LTHs sold 3.4M BTC since bull cycle began, while ETF inflows collapsed to zero, worsening capital flow imbalances. - Derivatives liquidations and $111,800 support tests highlight fragility, with 17% put/call skew and gamma overhang amplifying volatility. - Institutional demand must offset LTH selling to avoid prolonged decline, as 90% of Bitcoin supply now in profit nears correct
Bitcoin is at a pivotal point as on-chain indicators suggest the market may be losing steam, casting doubt on the durability of its latest surge. Data from analytics provider Glassnode shows that Bitcoin’s realized profit/loss ratio soared to unprecedented highs above 10 in 2025, a level historically associated with market tops fueled by profit-taking. The recent drop from a record $124,000 to $111,012 marks a 10.5% pullback—milder than previous corrections, yet it conceals underlying issues in capital movement.
Blockchain data points to a delicate equilibrium between institutional buying and long-term holder (LTH) selling. Since the start of the bull run, LTHs have realized profits on 3.4 million BTC, exceeding previous cycles and highlighting considerable selling from experienced investors. At the same time, US-listed
Activity in derivatives markets has deepened the correction through forced liquidations and a reduction in leverage. Futures open interest dropped sharply from $44.8 billion to $42.7 billion as Bitcoin slipped below $113,000, with concentrated liquidations between $114,000 and $112,000 fueling rapid sell-offs. While this process has purged excess leverage, it has also left the market exposed to sharp liquidity-driven moves. In options markets, downside risk has become more pronounced, as the put/call skew jumped from 1.5% to 17% after the correction. With options open interest near record levels, a gamma overhang has emerged, increasing volatility—especially to the downside, where dealers are short gamma.
The $111,800 mark has emerged as a key technical level for Bitcoin. It reflects the average cost basis for short-term holders and recently acted as a temporary support during the sell-off. Holding above this point could indicate a period of healthy consolidation, but a break lower would heighten the risk of further losses. Analysts at 10x Research caution that Bitcoin could swing by $20,000 in either direction in early Q4 2025, citing weak bullish momentum and large-scale whale selling of 147,000 BTC in September. Continued institutional buying is needed to counterbalance ongoing LTH selling and prevent a prolonged downturn.
Wider market signals highlight Bitcoin’s fragile standing. The cumulative volume delta (CVD) across leading exchanges has returned to neutral, erasing the strong buying seen earlier this year and suggesting fading confidence among spot traders near $111,000. Additionally, the share of Bitcoin supply in profit has hit a crucial 90% level, which has historically preceded market corrections. Analysts point to potential macro catalysts—like a possible US rate cut in September and the approval of altcoin ETFs in October—that could revive momentum. Nevertheless, short-term pullbacks may continue, presenting opportunities for long-term investors ahead of a possible rally in late 2025.
Whether Bitcoin can maintain support around $111,000 will be key in determining if this is merely a consolidation phase or the onset of a deeper decline. Without renewed institutional interest, the likelihood of steeper price drops increases, especially as on-chain data signals a market approaching exhaustion.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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