On-chain analytics firm Glassnode, in its weekly market report dated the 4th, assessed Bitcoin's (BTC) roughly 10% decline from its September high as a healthy correction that has cleared overheating. In early October, more than 97.5% of the bitcoin held by short-term holders was in profit; that figure has now shrunk to about 38%.
According to Glassnode, short-term holders are investors who purchased bitcoin within the past 155 days. The firm analyzes that if this ratio recovers above the 50% level, it would be a sign that recently entered investors are once again in profit and regaining confidence.
The recent correction has unwound much of the long-position leverage that had accumulated since August. The risk of cascading forced liquidations appears to have diminished. However, below the current price, long-position liquidation levels are concentrated in the $73,000 to $76,000 band, leaving room for a wave of forced selling. This level also overlaps with short-term holders' average cost basis and the 200-day moving average.
Meanwhile, above the current price, short-position liquidation levels have accumulated near $87,000. If prices turn higher, buying back these short positions could become a driver of further gains.
Note: Price figures are approximate, converted at about 160 yen to the dollar.
The illicit outflow from Binance reached the equivalent of $6.3 billion, the largest in cryptocurrency history. Glassnode noted that while bitcoin fell about 3% in the days after the breach was disclosed, it has since recovered to near the price level at the time the outflow began. It analyzed that the limited reaction to such serious news demonstrates the market's strength.
Still, looking at fund flows into spot bitcoin ETFs, there is no change in the situation of insufficient new demand from outside the crypto market. Glassnode expressed the view that if such demand returns, a market that has absorbed a large-scale shock has room to quickly turn higher. Since May, ETFs' average daily trading volume has been running at about $1.3 billion, roughly one-third the level of the preceding several months.
In the derivatives market, expectations for a year-end rally are evident. Open interest in the two major expiries—November 27 and December 25—stands at $5.7 billion and $12.5 billion, respectively. December calls (the right to buy) are concentrated at $80,000, $90,000, $100,000 and $120,000, while puts (the right to sell) sit below $60,000, suggesting traders are focused on upside potential.
Compared with traditional assets, bitcoin fell about 2% over the past two months, roughly on par with the S&P 500's decline of less than 1%. The proportion of trading days on which bitcoin moved in the same direction as the S&P 500 has reached half, the highest level since March 2025.
The market is also focused on price action after the U.S. Midterm Elections. Bitcoin has fallen after each of the past three midterm elections, and some are wary of a similar pattern this time. Glassnode's analysis suggests that the unwinding of leverage and the retreat of speculative overheating have eased vulnerabilities on the supply-demand front.
