Bitcoin is exhibiting the type of fatigue that usually precedes a larger directional move.
Traders booked $1.8 billion in profits on October 15, marking one of the heaviest outflow days since the beginning of the summer.
On the same day, the market incurred another $430 million in realized losses, confirming what everyone has been feeling since the weekend’s crash. That means momentum has been lost and much of the money is headed for the exits.
At the time of writing, Bitcoin sits at just over $110,000, down almost 10% since the beginning of October. Most of that loss is due to rapid unwinding by the same holders who bought in early 2025 and have held since then, rather than slow bleeding.
Long-term holders (i.e. coins older than 3 months) were responsible for the bulk of the sales, realizing more than 6 times the profit of short-term holders.
Long-term holders were still in the deep end during last week’s crash, so we can assume they are not panicking. They are risk-averse and taking profits off the table rather than waiting for a rebound.
After the stock consolidation, a certain amount of profit taking will be done on a daily basis. Billions of dollars in profit-taking dates can be explained as a healthy rotation. But as we’ve seen since the beginning of the month, when that flow becomes constant, it starts to look less like distribution and more like fatigue.
Realized losses are also recovering. Losses are still in a “manageable” range, but are increasing along with profits. If realized losses continue to increase along with gains, it may indicate that risk aversion is spreading from short-term holders to the rest of the market.
This could prove to be highly contagious, as half of Bitcoin’s short-term holders are currently underwater. According to Checkonchain data, unrealized losses currently account for about 2% of market capitalization, and although the scale is small, it is rapidly increasing.
Below $100,000, that number could easily rise to 5%, enough to turn the current discomfort into full-blown fear.
Historically, only a full-blown bear phase would wipe out more than 30% of supply, and we are now dangerously close to that threshold.
If buyers manage to protect $100,000, Bitcoin could reset its short-term cost base and regain bullish momentum.
Below $100,000, the cost base for a new wave of buyers collapses, and the entire short-term supply turns into a loss. While it doesn’t necessarily mark the end of the cycle, the correction could extend to $80,000, a drawdown of about 35% from ATH.
For now, Bitcoin remains surprisingly stable considering the amount of pressure on the seller side. But the message in this chain is unmistakable: faith is diluted.
The bulls are still on the defensive, but with each candlestick it becomes harder to tell whether they are buying on the edge or grabbing a knife.
