Bitcoin Hits Key Support; Analysts Warn Of Deeper Correction

What Happened

This model analyzes the distribution of Bitcoin investors’ acquisition costs to assess the likelihood of profit-taking at the current price level. Unlike traditional technical analysis, this tool uses actual blockchain data to identify accumulation patterns, offering a more precise view of institutional support and resistance zones.

Investor sentiment on Binance, the largest cryptocurrency derivatives platform by volume, also leans toward anticipating further adjustments.

Market Context

Bitcoin’s price is undergoing a market correction. On Tuesday, it retreated to $107,000 after briefly breaking above $111,000 the previous day.

On-chain data analysts now identify the current price range as a crucial inflection point. This point will determine whether the asset maintains its bullish trend or faces a moderate, medium-term correction.

The chart features several quantile lines, such as the 0.95 line (Red). This line represents the average price paid by the top 5% of Bitcoin holders—those with the highest cost basis.

When the Bitcoin price moves above this 0.95 line, it signals an overheated market and a high-risk zone where profit realization (selling) will likely increase. Conversely, when the price drops below the 0.95 line, the market enters a trend transition or equilibrium state. This is precisely where Bitcoin landed after the October 10 flash crash.

The current price level is hovering near the 0.85 quantile boundary. This is a kind of key support. A sustained break below this line is typically interpreted as an expanded risk of a medium-term correction.

Glassnode cautioned, “If buyers can hold this zone, momentum can rebuild from here. But lose it again, and the market likely revisits lower territory. This is a pivotal area to watch.”

Arab Chain, an analyst at CryptoQuant, noted, “October saw an increase in Bitcoin futures trading volume on Binance, with sellers dominating most days until yesterday.”

Arab Chain concluded, “Overall, the current data reflects a fragile balance between buyers and sellers, slightly tilted in favor of selling pressure. If this trend continues, it could pave the way for further corrections unless the market shows renewed buying activity or stronger institutional demand in the coming days.”

Why It Matters

Binance Bitcoin futures positions are currently slightly tilted toward the sell-side, shifting from a near 50:50 balance. The current long/short ratio sits at 0.955, and the Day-over-Day Change (DOC) of -0.063 signals a deceleration of positive momentum.

Details

A Critical Juncture for Bullish Momentum

On-chain data analysis platform Glassnode highlighted this situation by sharing its Cost Basis Distribution Quantile Model chart on X.

The Pivot Point: The 0.85 Quantile

Derivatives Traders Position for Further Downside

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