Cryptocurrency Investors Show Signs of Weariness Following Price Drop
In a significant development, Bitcoin, the world's leading cryptocurrency, has reached an all-time high of $124,000. This milestone comes amidst a period of stock market volatility and increased interest from traders.
As more traders enter the long position, the downside liquidity is enriched, providing a cushion against potential drops. However, pullbacks may trigger faster profit-taking due to the positive Net Unrealized Profit and Loss (NUPL), a measure of the stock market's overall sentiment.
The Network's unrealized profits for Bitcoin are at a peak, indicating a significant amount of paper profits in the market. This situation, coupled with the large paper profits, suggests that the market is carrying a substantial amount of optimism.
Multiple liquidity gaps exist on the bearish side, with potential sell-off pressure at $113k, $112k, $110k, $108k, $106k, and even at $105k on a 4-hour chart. These gaps, if filled, could cause a rapid drop in price.
The post-rate-cut rally pushed the price of Bitcoin to $117,900, but a sell-off pressure caused the price to drop below $110,000. The Federal Reserve announced a minimal rate cut of 25 bps, which may have contributed to the initial surge in Bitcoin's price.
However, at the meeting on September 1, 2025, the Federal Reserve presented a minimal interest rate hike of 25 basis points. This move could have triggered the sell-off, causing the price to drop further.
Bitcoin is currently trading within a defined range, with resistance at $118,000 and local support at $113,000. Buyers are defending the $110k to $108k range, but if the NUPL starts rolling over while the price ranges and distribution strengthens, it could lead to a price crumble.
The distribution at resistance could occur due to the positive NUPL, suggesting that sellers may be entering the market at these high prices. It's important to note that this crowding places most stops under obvious swing lows, which could potentially exacerbate any sell-off.
On the futures markets like Hyperliquid, there are twice as many long positions as short positions, indicating a heavily bullish sentiment. However, late entries to the market may face supply due to the positive NUPL, as sellers may be looking to take profits.
As of now, Bitcoin's current price stands at $115,600, with a market cap of $2.31 trillion. It's worth mentioning that on September 1, 2025, Bitcoin's price dropped to $107,280, highlighting the stock market's recent volatility.
In conclusion, while Bitcoin has reached an all-time high, the stock market remains volatile. Traders should exercise caution and closely monitor the NUPL, liquidity gaps, and overall market sentiment to make informed decisions.
