Bitcoin's $104K Threshold: A Battle Between Accumulation and Exhaustion

Bitcoin must hit $104K to repeat past bull market dips, according to a recent analysis by Glassnode. The cryptocurrency has been trading within a consolidation range between $104,000 and $116,000, with key levels potentially determining the next market direction. On-chain data shows investors accumulated during the recent pullback, filling the $108,000–$116,000 “air gap.” This accumulation was driven by consistent dip-buying behavior following Bitcoin’s mid-August all-time high and subsequent decline to $108,000.

The current trading range corresponds to the 0.85 and 0.95 quantile cost basis levels, ranging from $104,100 to $114,300. Historically, this range has served as a consolidation corridor after euphoric peaks, often resulting in sideways market movement. A break below $104,100 would signal a replay of post-all-time high (ATH) exhaustion phases, while a recovery above $114,300 would indicate renewed demand control.

Short-term holders (STHs), who hold Bitcoin for less than 155 days, have experienced significant pressure within the range. Their profitability dropped sharply in August 2025 but has since recovered to around 60%, indicating a more neutral market sentiment. Sustained recovery above $114,000–$116,000, where over 75% of STH supply would achieve profitability, is seen as crucial to restoring investor confidence and attracting new demand.

On-chain metrics such as the STH-Spent Output Profit Ratio (SOPR) have returned above the critical 1 threshold for the first time in 20 days, indicating that short-term investors are now selling at a profit after weeks of selling at a loss. This shift is typically seen as the end of a distribution phase, with a potential recovery rally on the horizon. However, analysts caution that the market may need to inflict more pain on short-term holders before the next upward move.

The futures market funding rates are currently at $366,000 per hour, a neutral level between the $300,000 baseline and the overheated levels seen in March and December 2024. Further compression below the threshold could signal deteriorating demand in derivative markets.

Institutional demand from traditional finance (TradFi) has also shown signs of weakening. Bitcoin ETF inflows, which had averaged over 3,000 BTC daily since April, have cooled to an average of just 540 BTC over the last 14 days. This decline mirrors similar patterns in Ethereum (ETH) ETFs and suggests a broader slowdown in institutional buying. Meanwhile, spot ETF flows have significantly outpaced CME futures positioning changes, indicating that TradFi investors have primarily expressed directional demand through spot exposure rather than derivatives strategies.

Bitcoin’s current range-bound trading follows its third multi-month euphoric phase of the current cycle, characterized by strong price momentum pushing most supply into profit. Sustained capital inflows are necessary to offset continuous profit-taking, a dynamic that has historically proven unsustainable over the long term. A break below $104,000 risks triggering post-ATH exhaustion and a potential decline toward $93,000–$95,000 levels, based on previous market cycles.