After Bitcoin (BTC) refreshed its historical high of $108,365 on the 17th, it subsequently experienced a major pullback of nearly 15%, dropping to a low of $92,268 on the 21st, but in the last 24 hours, Bitcoin has shown a stronger rebound, currently reporting at $98,085.

The extent of Bitcoin's pullback during the bull market is diminishing.

In response to the selling pressure that caused a 15% pullback in Bitcoin over the past week, Glassnode analyzed in its latest weekly report that, 'Although extreme selling pressure typically accompanies significant price increases in Bitcoin, the severity of market pullbacks during each bull market has decreased as the market size grows.'

The report states that the deepest drop in this cycle was -32%, occurring on August 5 of this year. Most declines only led to the BTC price falling 25% from local peaks, indicating that this cycle is one of the least volatile cycles to date. This phenomenon may reflect the immense demand brought by Bitcoin spot ETFs and the growing interest from institutional investors.

Long-term Bitcoin holders have realized profits reaching a new high of $2.1 billion.

Moreover, with prices consistently above $100,000 for several weeks, long-term Bitcoin holders are taking the opportunity to distribute supply to new demand. This has led to a recent historical high of $2.1 billion in realized profits for the group of long-term holders.

The report uses a simplified assumption that each seller is matched with a buyer, which can provide some insight into the strength of the demand side, potentially indicating that the demand side has provided approximately $2.1 billion in new capital to the market.

Bitcoin Wealth Redistribution

Bitcoin held for 6 to 12 months has dominated the current selling pressure, realizing $27.3 billion in profits since last November, accounting for 38.5% of the total. In contrast, tokens older than this remain relatively dormant.

The data above also shows that the wealth proportion of new investors has significantly increased, highlighting strong demand conditions and reflecting that wealth is shifting from long-term holders to new investors during the Bitcoin bull market.

However, the proportion of network wealth held by these new investors has not yet reached the heights experienced during previous ATH cycle peaks. The explanation here is that the market may not have reached the level of excitement and saturation among speculators seen in previous cycles.

The bull market has not yet peaked.

Finally, the report observed the AVIV ratio, which helps assess the average unrealized profits (paper gains) held by active investors in the market, to measure whether the market's current profitability relative to participants is overheated.

Generally, when all categories of investors achieve substantial profits, the bull market comes to an end, leading to significant supply-side pressure and a serious lack of new investors willing to buy at current prices.

Currently, the AVIV ratio has not reached the extreme range of +3σ, indicating that there may still be room for the market to operate before profits held by ordinary investors become too enticing.

Conclusion: The market may currently be approaching the late stage of the bull market.

The report concludes that as long-term holders continue to actively distribute tokens on a large scale, supply-side forces are becoming more prominent, achieving an impressive $2.1 billion in realized profits. However, strong demand is also evident, largely offsetting the significant selling pressure from existing holders.

Additionally, the proportion of network wealth held by new investors has significantly increased, supporting the concept of strong demand. However, this indicates that wealth distribution is shifting away from mature investors, which typically occurs in the late stages of a bull market.