Bitcoin Enters Classic Post-Peak Correction, $104K Mark Critical for Market Recovery
Bitcoin (BTC) is currently undergoing a textbook correction phase following its recent all-time highs, according to research from crypto analytics firm Glassnode. In its September 4 newsletter, “The Week Onchain,” Glassnode detailed how Bitcoin’s price is consolidating within a defined range, signaling typical market behavior after euphoric peaks.
Consolidation Corridor Between $104K and $114K
Since reaching its peak in mid-August, Bitcoin has experienced a volatile downtrend, dipping to approximately $108,000 before rebounding toward $112,000. This price action has left the market questioning whether the current phase represents a short-term contraction or the onset of a bear market.
Glassnode examined the active supply’s last movement prices, dividing them into quantiles to better understand market dynamics. The 0.95 quantile, representing the price level at which 95% of Bitcoin supply remains profitable, currently sits around $104,100.
“Bitcoin’s present trading range between the 0.85 and 0.95 quantile cost basis — roughly $104.1K to $114.3K — has historically served as a consolidation corridor after euphoric highs,” Glassnode explained. A break below $104,100 would mirror exhaustion phases from earlier in this bull cycle, while a recovery above $114,300 would indicate renewed demand and control over the trend.
Short-Term Holders Face Profitability Challenges
The analysis also highlights the behavior of short-term holders (STHs), defined as entities holding Bitcoin for up to six months. These holders typically provide support during bull-market corrections but have seen their profitability fluctuate significantly in the current price environment.
Glassnode noted that the percentage of STH supply in profit plunged from over 90% to just 42% during the recent dip to $108,000. This shift reflects a rapid transition from an overheated market to one under stress, with STHs potentially selling at losses before becoming exhausted and allowing for price rebounds, as observed in the recovery to $112,000.
Outlook and Market Implications
Bitcoin’s third euphoric uptrend within the ongoing bull market, culminating in August’s peak, exemplifies the unsustainable nature of sharp price surges. The current consolidation and short-term holder dynamics suggest a critical phase where price action near $104,000 will determine whether the market experiences deeper corrections or begins a new upward trajectory.
This analysis does not constitute investment advice. Market participants should conduct thorough research considering inherent risks in cryptocurrency trading.
FinOracleAI — Market View
Glassnode’s identification of the $104,000 level as a key support zone underscores a pivotal moment for Bitcoin’s short-term trajectory. A breach below this level risks prolonging the correction and increasing selling pressure, while stabilization above it could signal seller exhaustion and a resumption of bullish momentum. Investors should monitor short-term holder profitability and price action around this corridor to gauge market sentiment and potential trend shifts.
Impact: neutral
