Price Slips Below Key Support amid Momentum Drain
Bitcoin’s blistering 2025 rally has hit its first serious wall. After notching a record
high near $126,000 in early October, the asset began to unravel following the
10 October “Big Liquidation,” a cascade of forced sell-offs that erased nearly $5 billion
in open interest within hours. Since then, on-chain data from analytics firm
CryptoQuant show the market slipping into one of the most bearish phases of the
year. The platform’s Bull Score Index has collapsed from a euphoric 80 to just 20,
reflecting an abrupt pivot from aggressive spot buying to defensive positioning. With
spot demand shrinking and derivative funding swinging negative, the once
one-directional uptrend has lost its grip on momentum.
The psychological damage is clear on the chart. For the first time since June,
candles are closing beneath the $100,000 handle, a level that bulls had treated as
a de facto floor. Each failed attempt to reclaim six-figure territory is feeding a
feedback loop of lower highs, thinner order books, and wider bid–ask spreads—
classic signs of a market starved of fresh liquidity.
Stablecoin Liquidity Stalls
The softness in spot books is mirrored by a slowdown in stablecoin
issuance—historically a leading indicator of crypto buying power. Net inflows into
the top three dollar-pegged tokens expanded by less than 1 % in October, their
weakest monthly growth of 2025. With new stablecoin supply barely trickling in,
traders lack the dry powder that typically underwrites sustained rallies. The result
is a fragile backdrop in which even modest sell orders can drag price below key
averages.
Long-Term Holders Flip to Net Distribution
Perhaps the most jarring shift is coming from wallets that held coins for at least
155 days—a cohort typically viewed as Bitcoin’s “smart money.” Over the past 30
days, these long-term holders have disgorged roughly 815,000 BTC, their heaviest
distribution burst since January 2024. During the euphoric first half of the year,
ravenous demand from spot ETFs, macro funds, and retail newcomers easily absorbed
comparable sell-side pressure. That buffer is gone. With spot volumes now
subdued, the steady drip of supply is landing squarely on thinner bids, amplifying
every downtick.
Notably, the selling has been driven by profit realization rather than panic.
Realized-profit spikes—most recently near $3 billion on 7 November—highlight that
many holders are locking in gains rather than capitulating at a loss. Historically,
true macro bottoms form only after realized losses surge, flushing weaker hands.
Until that pain signal appears, analysts warn that the market may still be early in
its corrective arc.
The 365-Day Moving Average Becomes the Line in the Sand
Technicians are laser-focused on the 365-day simple moving average, now hovering
near $102,000. Throughout the current cycle, this long-period trend line has acted
as the market’s ultimate support, catching every deep pullback since late 2023.
Bitcoin has already pierced the level intraday on multiple occasions this month,
something it never did during its spring-summer ascent. Should daily closes
continue to print below the average, historical precedent suggests the door opens
to a more pronounced drawdown—potentially toward the mid-$80,000 zone where the
next cluster of on-chain cost bases resides.
For now, traders face a classic inflection. A swift reclamation of the 365-day
average could transform the recent washout into a healthy shakeout, resetting
overheated funding rates and clearing a path back toward all-time highs. Failure to
do so would confirm a regime change: a transition from the impulsive, liquidity-rich
bull leg of 2025 to a grind marked by defensive flows, thinner liquidity, and
broader risk-asset caution. The next several weekly candles may decide which
narrative prevails.
