Bitcoin Has Room For Another October Rally As 97% Holders are In Profit, But Experts Warn of Leverage Risks

Bitcoin (BTC) rallied to a new all-time high earlier this week, profiting nearly all of the alpha cryptocurrency’s circulating supply, despite its price dropping 1.4% in the past 24 hours. While most analysts suggest that the market has stable foundations, some have warned of short-term fragility.

BTC fell as the U.S. Dollar Index (DXY) climbed by 0.3% to touch its highest level since early August. A stronger dollar typically puts selling pressure on risk assets, such as equities and cryptocurrencies.

Bitcoin Price Dips as U.S. Dollar Regains Strength, Ending Debasement Trade Trend

Analysts say the pullback reflected the unwinding of the “debasement trade” trend, where investors who previously sought bitcoin and gold as hedges against rising inflation and currency weakness are now taking profits as the greenback regained strength. The dollar’s rebound came amid reports that the Federal Reserve may keep its interest rates higher for longer as U.S. economic conditions improved. (Establishment of the Strategic Bitcoin Reserve and United States Digital Asset Stockpile)

Bitcoin’s price has grown over 40% year-to-date, outperforming major stock indexes like the S&P 500 and Nasdaq Composite. One key reason behind the drop was profit-taking, which is quite normal after a strong rally, creating selling pressure and temporarily pushing prices downward. Another factor was the decrease in on-chain activity, as data shows that fewer transactions are taking place on the Bitcoin network, suggesting that investors are hardly interacting with the blockchain. Drop in on-chain activity also contributes to price drops.

97% of Bitcoin Holders are in Profit. Healthy Bull Market Signals Profit-Taking has been Balanced by Fresh Demand

According to blockchain analytics platform Glassnode, the accumulation trend and bitcoin’s subsequent rally to a new all-time high have lifted 97% of its circulating supply back into profit. Their report suggested that elevated profit levels often precede consolidation, and realized profits remain contained, with the capital rotation being in an “orderly” fashion rather than distribution pressure.

This means that investors have been gradually taking profits and reallocating capital rather than engaging in panic selling en masse, which is a classic sign of a healthy bull market where profit-taking is balanced by fresh demand for the asset.

Glassnode highlighted bitcoin’s structural support using a Cost Basis Distribution Heatmap, which showed weakened support between $120,000 and $121,000 and stronger support near $117,000, which is the level where 190,000 BTC ($23.13 billion) was purchased. While price discovery phases carry the inherent risk of exhaustion, a potential pullback into this region could ignite renewed demand as recent buyers protected profitable entry zones.

The report suggests that the $117,000 zone is a key area to watch for price stabilization and momentum resurgence.

Glassnode noted that surging trading volumes confirmed strong institutional demand in BTC futures and spot exchange-traded fund (ETF) markets; however, rising leverage and funding rates could introduce short-term fragility.

US-listed spot Bitcoin ETFs recorded more than $2.5 billion in inflows within the first three days of the week, including their second-highest daily inflow. The analysts concluded their report by stating that this week’s on-chain signals outline a “robust yet maturing uptrend”, one that remains supported but is increasingly sensitive to profit-taking and leverage resets as bitcoin navigates price discovery territory.

Experts are Largely Optimistic about Bitcoin’s Q4 2025 Price Growth

The latest weekly report from CryptoQuant states the current bull market still has momentum as profit-taking remains below prior cycle peaks despite BTC already setting numerous all-time highs this year.

Bitcoin holders have realized just $30 billion in profits over the past 30 days, which is a 50% decline from the $63 billion peak from July 2025, and well below the $78 billion levels observed during the market tops from March and December 2024. This conviction also extends to long-term holders, whose realized profit margins currently stand at 129%, which is far below the 300% threshold that typically signals market exhaustion.

In an interview given to Decrypt, crypto researcher Adam Chu noted that call options between $120,000 and $140,000 remain the most heavily concentrated bitcoin positions, with $120,000 having the highest concentration of contracts. He also noted that major players are focused on out-of-money calls, which are options contracts that become profitable only if BTC rises above specific strike prices.

Market maker gamma levels also remain low, which means minor fluctuations have a limited impact on Bitcoin’s price. He added that $110,000 now serves as crucial support while new highs could trigger accelerated buying activity. 

This combination of disciplined holding patterns and sophisticated bullish market positioning points towards sustained upward momentum. Several experts and institutional traders believe that October’s market conditions remain favorable, while remaining optimistic for Q4 2025.

Also Read : Bitcoin Next 24 Hours Price Prediction

At the time of writing, Bitcoin (BTC) is trading at $121,796 – down 0.75% in the last 24 hours.