Bitcoin News Today: Investors Rotate Positions as Bitcoin's Bull Trend Shows Signs of Stress

Bitcoin's recent record highs above $126,000 have triggered growing concerns among analysts about a potential pullback, with on-chain metrics and market dynamics suggesting increased fragility in the current bull trend. Blockchain analytics firm Glassnode reported that Bitcoin's Accumulation Trend Score (ATS) has fallen below 0.5, a threshold historically associated with distribution phases. This decline reflects broad-based profit-taking across all wallet sizes, from large holders with over 10,000 BTC to small wallets holding less than 1 BTC. Such widespread distribution signals a shift in market sentiment, as investors rotate positions rather than panic-selling, a pattern typical of maturing bull cycles.

The ATS, which measures the relative strength of accumulation or distribution by wallet cohort, has shown a sharp reversal from accumulation to distribution since late August. Prior to this, Bitcoin's rally to $124,000 was fueled by institutional demand, including over $2.2 billion in inflows to spot ETFs within a week. However, the same data reveals a rise in the Sell-Side Risk Ratio, indicating elevated leverage and crowded positioning in derivatives markets. While this ratio remains below levels observed at previous market tops, it highlights growing short-term risks. Analysts warn that corrections could be amplified by forced unwinding of leveraged positions or a loss of confidence in risk assets.

Historical patterns further support the likelihood of a near-term pullback. Bitcoin has traditionally corrected after reaching new all-time highs, with August often marking a quieter trading period. The last three Augusts saw double-digit percentage declines, and the current ATS reading aligns with prior distribution cycles. Additionally, Glassnode's Cost Basis Distribution Heatmap identifies a key support zone between $117,000 and $120,000, where approximately 190,000 BTC were last acquired. A pullback into this range could attract renewed demand as traders defend profitable entry points, but failure to hold this level may trigger deeper corrections.

The macroeconomic environment adds another layer of complexity. While the MOVE index-a volatility gauge for Treasuries-has declined to multi-year lows, signaling easing financial conditions, the dollar index (DXY) and Treasury yields remain resilient. Goldman Sachs has flagged risks from Japan's bond market instability, which could spill over into U.S. Treasuries and indirectly pressure crypto markets. These factors underscore the sensitivity of Bitcoin to broader macroeconomic shifts, particularly as institutional investors balance exposure to risk assets with traditional market dynamics.

Despite the bearish indicators, some analysts remain cautiously optimistic. CoinDesk's Omkar Godbole notes that Bitcoin's hourly chart has tested a key ascending trendline and bounced back, suggesting the uptrend remains intact. However, a breakdown below this line could initiate a corrective phase with $118,000 as the first target. Meanwhile, ETF flows and surging volumes in futures markets indicate strong institutional demand, which could stabilize prices if leveraged selling subsides.

In summary, Bitcoin's post-record high trajectory appears increasingly sensitive to profit-taking and leverage resets. While the $117,000–$120,000 support zone offers a potential floor, sustained weakness in macroeconomic indicators or forced unwinding of leveraged positions could push prices below $120,000. Market participants are advised to monitor on-chain metrics, ETF inflows, and traditional market volatility for further signals.

Source: [1] Blockworks (https://blockworks.co/news/market-dip-bitcoin-accumulation-glassnode)

[2] Coindesk (https://www.coindesk.com/markets/2025/08/19/all-bitcoin-wallet-cohorts-now-in-distribution-mode-glassnode-data)

[3] CoinDesk (https://www.coindesk.com/markets/2025/10/07/onwards-and-upwards-for-bitcoin-as-move-melts-down-dollar-and-bonds-signal-caution-to-risk-assets)

[4] Yahoo Finance (https://finance.yahoo.com/news/bitcoin-slides-126-000-peak-075607941.html)

[5] Cointelegraph (https://cointelegraph.com/news/nearly-all-bitcoin-supply-profitable-but-short-term-fragility-emerges-glassnode)