Bitcoin (BTC) is trading within the combined range of $104,000 to $116,000, revealing the key levels in which on-chain data can determine the next directional movement.
According to a September 4 report by GlassNode, Bitcoin entered a decline in volatility after a record high in mid-August, dropping to $108,000 before rebounding to its current level.
UTXO's price distribution shows investors have accumulated pullbacks, filling the “air gap” between $108,000 and $116,000 through consistent dip viewing behavior.
The current trading range corresponds to quantile cost basis levels of 0.85 and 0.95, ranging from $104,100 to $114,300. Historically, this zone serves as a consolidated corridor following an euphoric peak, creating a market that is often next to the choppy.
Below $104,100 it regenerates the post-fatigue phase of AT seen before this cycle, but recovery above $114,300 informs updated demand management.
Short-term holder trends
Short-term holders face pressure within the range, and their profit margins collapsed from over 90% to 42% during the decline, reaching $108,000.
A sharp reversal usually causes fear-driven sales from recent buyers before seller fatigue allows for rebound.
Currently, over 60% of short-term holders are back in profit, representing neutral positioning compared to recent extremes.
More than 75% of short-term holder supply achieves profitability, so there are only maintenance recoverys above $114,000-$116,000, which can restore the trust needed to attract new demand.
The futures market funding rate is $366,000 per hour, and is placed neutrally between a baseline and overheating level of $300,000,000, above the $1 million seen in March and December 3024.
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Further compression below the threshold will confirm a wider deterioration in demand across derivative markets.
tradfi demands contraction
The Spot Exchange-Traded Fund (ETF) flow reveals a weakening of institutional demand from traditional financial (TRADFI) channels.
Since April, Bitcoin ETF inflows have averaged over 3,000 BTC daily, but by July it has cooled to its current 14-day average of just 540 BTC. The contraction reflected a similar pattern of Ethereum (ETH) ETFs, with influx dropping from 56,000 to 85,000 ETH to 16,600 ETH daily.
The Bitcoin ETF flow significantly outweighs CME futures positioning changes, indicating that TradFi investors have expressed demand for direction primarily through spot exposure rather than derivative strategies.
This suggests a greater use of cash and freight arbitrage strategies, unlike the Ethereum market, where CME's open profit changes represent more than 50% of cumulative ETF inflows.
The trade, surrounded by range, follows the third-month euphoric phase of Bitcoin in the current cycle, and features overwhelming price momentum.
During these periods, sustained capital inflows are required to offset the continued profits. This is a dynamic that has historically proven to be historically unsustainable in the long run.
Breaking the risk below $104,000 will trigger after fatigue and have potential drawbacks towards levels between $93,000 and $95,000 based on previous cycle patterns.
