Bitcoins recent pullback is a textbook buy the rumour, sell the news reaction. But Glassnode said that the broader context reveals a market showing signs of exhaustion.

On-chain data, for one, shows that the current 12% drawdown is modest relative to historical cycles, but it comes on the heels of massive capital inflows.

ETF Slowdown + Heavy Profit-Taking

Since November 2022, Glassnode has found that three major waves of investment have lifted Bitcoins Realized Cap to $1.06 trillion, which is nearly $678 billion in net inflows, and is almost 1.8 times larger than the prior cycle.

These waves have not only driven price appreciation but also triggered repeated profit-taking events, with the Realized Profit/Loss Ratio indicating cyclical peaks each time over 90% of coins moved realized gains.

Besides, long-term holders have realized 3.4 million BTC and have already surpassed previous cycles, which highlighted the heavy distribution and maturity of the rally.

ETFs and other regulated trading vehicles, which historically absorbed supply and stabilized price, have slowed significantly in the wake of macro events, including the FOMC, which has left the market vulnerable.

During this period, LTH selling surged to 122K BTC per month, while ETF netflows dropped to near zero. Such moves can easily tip in favor of downside pressure.

Spot markets bore the immediate impact, as seen with volumes spiking after forced liquidations swept through thin order books, while futures experienced sharp deleveraging and options markets amidst increased risk sentiment through skew expansion. These factors collectively indicate that short-term liquidity is dominating price action, rather than fresh capital entering the market to support momentum.

Unless demand from institutions and holders aligns again, the risk of deeper cooling remains high, highlighting a macro structure that increasingly resembles exhaustion.

These obvious signs of exhaustion haven’t stopped certain cohorts of whales from seizing the pullback to expand their holdings.

Whale Accumulation Amidst Market Fatigue

Over the past seven days, whales, wallets holding 100-1,000 BTC, have accumulated roughly 30,000 BTC. On-chain transfers surged from 440,000 to over 770,000 BTC during the decline, while exchange outflows indicated strategic storage rather than selling. Short-term holders are now near loss territory, which could mean that local lows may be forming.

Sitting at the 21-week EMA near $109.5K, Bitcoin is testing key support, suggesting the current whale-driven accumulation could be laying the groundwork for a potential reversal.

Meanwhile, analysts at Bitunix said that key liquidity support sits at $108K. They, however, warned that a breakdown could test the $106K-$107K range. On the upside, $110K-$112K represents a stop-loss cluster for longs, while $116K is the major resistance that would require clear capital inflows to break.