BTC: Profit-Rich Sell-Off Shows Leverage Risk
Posted: Thu Oct 16, 2025 1:04 pm
Recent on-chain data from Glassnode reveals that Bitcoin’s latest sell-off happened while over 90% of the total BTC supply was still in profit. This sets it apart from historical capitulation events like those following the FTX or Luna collapses, when less than 65% of coins were profitable.
The data suggests that this was not a panic-driven market collapse, but rather a targeted deleveraging — a wave of liquidations hitting leveraged traders and large holders. The majority of realized losses came from whale-sized accounts, likely forced to unwind positions amid rising volatility and margin stress.
Interestingly, such conditions tend to mark structural corrections, not emotional sell-offs. With most holders still in profit, the broader investor base remains confident, showing resilience in the face of temporary price retracements. This also implies that Bitcoin’s long-term market health remains intact, as selling pressure originates mainly from leveraged traders rather than retail capitulation.
However, high profitability across supply can also signal market overheating — historically a precursor to short-term corrections.
Conclusion:
This was not a fear-based exodus but a leverage flush in an otherwise healthy market. As long as profit ratios remain elevated and losses are isolated to larger players, Bitcoin’s underlying strength continues to hold.
The data suggests that this was not a panic-driven market collapse, but rather a targeted deleveraging — a wave of liquidations hitting leveraged traders and large holders. The majority of realized losses came from whale-sized accounts, likely forced to unwind positions amid rising volatility and margin stress.
Interestingly, such conditions tend to mark structural corrections, not emotional sell-offs. With most holders still in profit, the broader investor base remains confident, showing resilience in the face of temporary price retracements. This also implies that Bitcoin’s long-term market health remains intact, as selling pressure originates mainly from leveraged traders rather than retail capitulation.
However, high profitability across supply can also signal market overheating — historically a precursor to short-term corrections.
Conclusion:
This was not a fear-based exodus but a leverage flush in an otherwise healthy market. As long as profit ratios remain elevated and losses are isolated to larger players, Bitcoin’s underlying strength continues to hold.