Editor’s Note: With the arrival of August, the crypto market has first welcomed a significant pullback. Bitcoin briefly fell below $115,000 this morning, and Ethereum also lost the $3,700 level. Although the market successfully absorbed a massive sell-off of 80,000 BTC last week, the aftershocks of this wave of selling seem not to have fully dissipated. Coupled with the pullback in U.S. stocks and Trump’s renewed mention of tariffs, the uncertainty in the market remains high. Below is the original content:

Last weekend, the liquidity of Bitcoin underwent a significant test when an early investor sold over 80,000 BTC through Galaxy Digital's over-the-counter trading service. Despite this, the market still demonstrated strong resilience, with the vast majority of investors choosing to hold rather than realize paper gains.

Executive Summary

Last weekend, the liquidity of Bitcoin faced severe challenges, as an early large investor sold over 80,000 BTC through Galaxy Digital's over-the-counter trading service. Although this sell-off, amounting to $9.6 billion, put pressure on the market's rise, the market quickly absorbed the significant selling pressure, with the price briefly dropping to $115,000 before quickly stabilizing at $119,000, slightly below the historical high.

Even after such a large-scale sell-off event, the unrealized profit held by market participants remains considerable. Currently, the total unrealized profit amounts to 1.4 trillion USD, with 97% of the circulating supply still in a profitable state.

According to multiple on-chain valuation models, the price of Bitcoin is currently in the range of $105,000 to $125,000. A valid breakout could lead to a further upside of $141,000, where significant selling pressure could be seen given the large amount of unrealized profit realisation expected.

Deep Liquidity

Realized Cap is a fundamental metric in on-chain analysis, used to quantify the total liquidity of the Bitcoin network measured in US dollars. Currently, this metric has surpassed $1.02 trillion, highlighting the increasing liquidity depth and market thickness of this asset.

Last weekend, this liquidity underwent a real test. An early Bitcoin investor sold 80,000 BTC (approximately $9.6 billion) using services from Galaxy Digital, possibly through a combination of market sell-offs and over-the-counter trading. The resulting selling pressure pushed the price down to $115,000, before stabilizing at $119,000.

This event highlights Bitcoin's ability to absorb large sell orders even during weekend trading periods when liquidity is typically thinner, confirming the robustness of the market structure.

This event has simultaneously driven the Net Realized Profit/Loss indicator to a historic peak of 3.7 billion dollars. It is worth noting that the surge in this indicator occurred ahead of the weekend sell-off, reflecting an early movement of funds before the final allocation.

Since this batch of tokens was initially marked as internal transfers by the entity adjusting the algorithm, subsequent address changes made through Galaxy Digital were recorded as transactions with economic significance, namely ownership changes.

The recent surge in profit-taking behavior has driven the realized profit/loss ratio to accelerate sharply, with current realized profits reaching 571 times the losses. This value is at an extremely high level, with only 1.5% of trading days in history exceeding this level.

However, interpreting this signal requires caution. While extreme profit-taking behavior may accompany price tops (as in the case of the historical high of 73,000 USD on March 7, 2024), this is not an immediate reaction. For example, when it broke through 100,000 USD at the end of 2024, the peak of profit-taking occurred at the 98,000 USD level, but the market continued to rise by 10% to 107,000 USD before peaking.

This lag indicates that significantly increased profit-taking often foreshadows (but does not immediately lead to) market exhaustion. It creates supply pressure that takes time to digest, and the market response may have a time lag.

Holding Duration Analysis

After digesting a large amount of long-term dormant tokens, the Long-Term Holder Net Realized Profit/Loss reached a historic high of $2.5 billion, surpassing the previous peak of $1.6 billion. This marks the largest single selling pressure event in Bitcoin's history, an extreme liquidity stress test, yet the market has shown remarkable resilience, with prices consistently oscillating near historical highs.

This further confirms the extraordinary resilience of the Bitcoin market during significant distribution events, having already witnessed challenges such as the Mt. Gox compensation and the German government's sell-off in this cycle.

By comparing the supply ratio of long-term and short-term holders, it can be seen that during the formation of the three historical peaks in this cycle, the same pattern occurred: after the initial accumulation phase, there is always a sharp shift towards aggressive distribution.

The current allocation phase is still ongoing, and the LTH/STH supply ratio continues to contract. Over the past 30 days, this ratio has decreased by 11%, with only 8.6% of trading days experiencing a more severe drop, highlighting the intensity of the shift in investor behavior.

Unrealized Profit Analysis

Despite facing significant selling pressure over the weekend, including massive profit-taking by long-term investors, the Bitcoin market remained unusually stable. Therefore, the vast majority of participants are still holding considerable unrealized profits, with 97% of the circulating supply currently having a holding cost lower than the spot price.

The total unrealized gains held by market participants recently reached a historic peak of 1.4 trillion dollars. This indicates that most investors are sitting on substantial floating profits, which could trigger potential selling pressure in the future if prices continue to rise.

We can also observe the proportion of unrealized profit market value as a standardized indicator. Currently, this indicator has once again broken through the +2σ range, which historically coincides with periods of market euphoria and historical peaks. This again confirms the reality that participants hold significant unrealized profits from a standardized perspective.

This indicates that many investors are optimistic about market conditions, which is both a booster of sentiment and suggests that the motivation for subsequent profit-taking may strengthen.

Unlike previous cycles, the current long-term holders still control 53% of the wealth. Although this group continues to distribute during this cycle, this proportion remains considerable in an environment where unrealized profits are at a high level.

Overall dynamics indicate that long-term holders may still have further selling to do. As prices rise to enticing levels sufficient to activate deeply dormant whale tokens, the market needs more demand inflow to absorb the selling pressure.

Market Cost Analysis

The Bitcoin cost basis distribution chart shows that there is a significant accumulation of cost basis in the range of $117,000 - $122,000. This indicates that a large number of investors have accumulated in this high price range.

It is worth noting that there is a trading volume vacuum zone in the range of 110,000 to 115,000 USD below the spot price, which is the result of insufficient turnover during the rapid price rise. Not all vacuum zones need to be filled, but there is price gravity in this area, and the market may need to test the validity of this support, making it a key area to focus on during pullbacks.

The cost basis of short-term holders (representing the average holding cost of new investors) has historically been a key threshold for distinguishing between local bull and bear market conditions. Adding standard deviation ranges can increase the statistical dimensions:

· STH CB +2σ: 141,600 USD

· STH CB +1σ: 125,100 USD

· STH cost basis: 105,400 USD

· STH CB -1σ: 92,100 USD

The key observation is that the Bitcoin price remains above the short-term holder cost basis, which is a positive signal for a strong market. Additionally, in all major top structures of this cycle, the price has encountered resistance in the +1σ range, and the current pattern is no exception.

The macro perspective shows that before a decisive breakthrough, Bitcoin may maintain a fluctuation range of $105,000 - $125,000. If a valid breakthrough occurs, the $141,000 area (corresponding to the +2σ range) may become the next strong resistance level, where on-chain indicators suggest that selling pressure may increase sharply.

By analyzing the cost basis of short-term holder internal subgroups, a "fast-slow cost basis band" can be constructed as a momentum indicator of short-term market sentiment. The current price is still above the cost basis of all short-term subgroups, indicating market strength. It is worth noting that the cost basis band of holders from 24 hours to 3 months (110,000 to 117,000 USD) highly overlaps with the low volume area in the cost basis distribution chart.

The resonance of multiple independent indicators reinforces the importance of this price area, suggesting it may become a key support during a pullback.

To gain deeper insights into the momentum of subgroups, we use an equally weighted composite index to measure the proportion of profitable subgroups. This index has been consistently above the mean and approaching the +1σ level, indicating that the current market momentum is robust, and most new investors are still in a profitable state.

Summary and Conclusion

Last weekend, Bitcoin's resilience was put to a severe test as the market efficiently absorbed the sell-off of 80,000 BTC (worth 9.6 billion dollars), marking one of the largest profit-taking events in its history. Despite the astonishing trading volume, the price quickly stabilized near historical highs, highlighting the depth and maturity of the current market liquidity.

Currently, Bitcoin is fluctuating in the range of 105,000 - 125,000 USD. A valid breakthrough of this range could change the market landscape, making 141,000 USD the next focus, with on-chain indicators suggesting that severe profit-taking may occur in this area. Conversely, the low volume zone below the current price of 110,000 - 115,000 USD is worth close attention; if a pullback occurs, this area will become a key observation point.