Bitcoin's Cooling Short-Term Activity vs. Expanding Long-Term Seller Base: A Tipping Point for Bulls?

Bitcoin’s on-chain dynamics in late 2025 reveal a critical divergence between short-term and long-term market behavior. While normalized address activity (NAA) has plummeted to 30%—a stark drop from the 60% peak during Bitcoin’s all-time high—annual NAA has risen to 40%, signaling an expanding base of long-term sellers [1]. This juxtaposition raises a pivotal question: Is Bitcoin approaching a structural inflection point where short-term cooling could catalyze a deeper correction, or will institutional and whale-driven accumulation stabilize the market?

Short-Term Cooling: A Symptom of Profit Realization

The decline in NAA to 30% reflects reduced transactional intensity, with fewer coins moving on-chain. This cooling suggests that speculative demand—driven by retail traders and short-term investors—has waned [1]. Historically, sustained NAA levels above 1 million active addresses have correlated with bullish cycles, but the current 919,000 active addresses indicate a fragile equilibrium [1]. The drop in short-term activity may also signal profit-taking by mid-term holders, as evidenced by the 12% spike in the whale ratio (proportion of Bitcoin held by large holders) in August 2025 [1].

Whale behavior further complicates the narrative. A $2.7 billion offloading of 24,000 BTC by a single whale in late August triggered a 4% price correction, exposing thin liquidity and bearish sentiment [2]. However, institutional players have capitalized on dips, with entities like MicroStrategy and U.S. ETFs (e.g., BlackRock’s IBIT) absorbing 15% of Bitcoin’s supply through strategic accumulation [1]. This duality—retail cooling versus institutional heating—highlights a market in transition.

Long-Term Sellers: A Structural Tailwind or Headwind?

The annual NAA rise to 40% underscores a growing cohort of long-term sellers, many of whom are realizing profits at elevated price levels [1]. This trend aligns with Bitcoin’s positioning in a late-cycle bull market phase, marked by elevated long-term holder (LTH) profits and ETF outflows [1]. On-chain metrics like the Spent Output Profit Ratio (SOPR) at 1.016 and the Market Value to Realized Value (MVRV) ratio at 2.16 further confirm fragility, as speculative gains unwind [1].

Yet, institutional dominance introduces a stabilizing force. Cold wallet inflows have mirrored bull market setups seen in 2021, and the whale ratio’s 12% spike suggests strategic accumulation by macro investors [1]. For instance, a $250 million BTC transfer to Coinbase International in August 2025, followed by a $250 million short liquidation, signaled institutional positioning ahead of a potential bull market phase [1]. These actions imply that key support levels—such as $100,000–$107,000—may attract aggressive buying, particularly if on-chain data confirms reduced selling pressure [1].

Market Structure: Stabilization or Correction?

Bitcoin’s technical outlook hinges on its ability to reclaim critical resistance levels. A bullish flag pattern on the monthly chart suggests a retest of all-time highs is in view, with immediate support at $110,000–$112,000 and resistance between $115,000 and $117,000 [1]. A sustained break above $123,000 could accelerate bullish momentum, but a breakdown below $110,000 would likely trigger a deeper correction toward $80,000–$90,000 [1].

Whale behavior remains a wildcard. While some whales are diversifying into Ethereum and WBTC, others are aggressively accumulating Bitcoin, reflecting strategic confidence in the broader crypto ecosystem [3]. The $11 billion in BTC movements in August 2025, however, underscores the volatility inherent in whale-driven markets [3].

Conclusion: A Tipping Point for Bulls?

Bitcoin’s current juncture represents a delicate balance between short-term cooling and long-term structural strength. While declining NAA and whale sell-offs pose near-term risks, institutional accumulation and regulatory clarity (via the CLARITY and BITCOIN Acts) provide a robust foundation for stabilization [1]. The market’s next move will likely depend on the Federal Reserve’s September rate decision and whether on-chain data confirms a shift from distribution to accumulation. For now, bulls must monitor Coin Days Destroyed (CDD) spikes and ETF inflows as potential harbingers of a rebound [1].

Source:[1] Bitcoin's Late-Cycle Sell Pressure: A Strategic Guide for ... [https://www.ainvest.com/news/bitcoin-late-cycle-sell-pressure-strategic-guide-navigating-profit-positioning-correction-opportunities-2508/][2] Bitcoin Risks Breaking $110K Support as Technicals Signal Further Downside [https://bravenewcoin.com/insights/bitcoin-btc-price-prediction-bitcoin-risks-breaking-110k-support-as-technicals-signal-further-downside][3] Bitcoin's Short-Term Instability: Whale Activity and Investor ... [https://www.ainvest.com/news/bitcoin-short-term-instability-whale-activity-investor-sentiment-leading-indicators-2508/]