Bitcoin (BTC) state, following its new all-time high of $126,000, is facing tests from profit-taking and elevated leverage.
As Glassnode reported on Oct. 8, mid-tier holders that have accumulated between 10 and 1,000 BTC have driven demand over recent weeks, while whale distribution has eased since earlier this year.
The Trend Accumulation Score shows that this alignment among smaller entities adds structural depth to the advance. Nearly all circulating supply now sits in profit, though limited support exists between $120,000 and $121,000.
A stronger cluster near $117,000 holds roughly 190,000 BTC, marking a zone where buyers may defend positions if prices retreat.
The Sell-Side Risk Ratio rebounded from its lower bound, confirming investors’ lock-in gains as Bitcoin enters a period of price discovery.
The metric remains well below historical cycle peaks, indicating controlled selling consistent with a healthy bull phase rather than exhaustion.
Demand remains strong
According to Farside Investors data, US spot ETF inflows exceeded $4.8 billion so far in October, matching the strongest institutional buying since April.
Daily spot volume climbed to levels unseen since spring, confirming renewed participation and deeper liquidity behind the breakout.
Futures open interest reached new highs as Bitcoin surged past $120,000, while annualized funding rates rose above 8%.
This rapid expansion in leveraged long positions creates setups that historically resolve through liquidations or brief cooling phases.
Short-term volatility often spikes when leverage builds at this pace, allowing excess positioning to reset before sustainable trends resume.
Options point to volatility
Options markets indicate that implied volatility has increased across all maturities, with at-the-money volatility rising by approximately one point, while one-week contracts have surged from 31.75% to 36.01%.
The 25-delta skew narrowed 21 points in under a week, shifting from deeply bearish to nearly neutral as traders rotated from defensive hedging to opportunistic call buying.
Dealers maintain long gamma positions around current strikes into month-end expiry, a structure that amplifies two-way price pressure.
Call activity dominates recent flows, though both buyers and sellers engage at scale through spreads and covered strategies.
With skew now neutral and implied volatility elevated, bullish positioning has become more expensive than a week prior, suggesting crowded sentiment that could trigger sharp swings.
Bitcoin’s structure remains constructive with mid-tier accumulation, strong ETF demand, and key support near $117,000.
Rising leverage and funding rates above 8% introduce near-term fragility as the market navigates uncharted territory, leaving the uptrend mature but vulnerable to resets.
