Key Takeaways
Bitcoin’s sharp pullback has flushed out newer investors, but LTHs remain strong as the market tests key support. Holding above $110.8K could confirm this as a healthy reset and not a full breakdown.
Bitcoin’s [BTC] latest pullback has shaken out fresh investors, but veteran holders aren’t flinching.
After a sharper washout than April’s tariff-driven drop, the market is testing whether it can reset on firmer ground. At press time, BTC held just above $110K, matching the Average Cost Basis for 1–3 month holders.
It’s a key level to watch. Keeping it could steady sentiment, but losing it has opened the doors to deeper correction before.
Flash crash cleared the decks
The flash crash on the 24th of August turned out to be an even bigger long-deleveraging event than April’s tariff-driven slump!
Data showed Long Liquidation Dominance spiking to 18%, the highest in months, as overleveraged longs were wiped out.
Source: CryptoQuant
This aggressive clearing of leverage often resets the market, leaving room for a healthier bounce. With speculative excess reduced, Bitcoin may find a firmer footing.
But whether it can sustain momentum depends on holding key support levels in the days ahead.
Why does this shakeout matter?
What we’re seeing now looks like a classic market cleanse.
On-chain data showed the pain being centered on Bitcoin’s newest investors.
Those holding coins for less than a month are sitting on an average Unrealized Loss of 3.5%, and many have already sold, driving a clear drop in supply from this group.
Source: CryptoQuant
But zoom out, and the picture shifts.
Source: CryptoQuant
The broader Short-Term Holder (STH) group, aged 1–6 months, stayed profitable, with average gains of 4.5%. Their resilience suggested only “tourist” buyers were being flushed out.
According to a report on CryptoQuant, this is a bullish reset: coins are moving from fearful sellers to more resilient hands, lowering overhead supply and setting up stronger support.
Source: Glassnode
The key level to watch is $110.8K which is the Average Cost Basis of 1-3 month holders, per Glassnode. Holding above it could stabilize the market and confirm this reset as healthy.
Lose it, and history shows Bitcoin could face deeper, drawn-out corrections.
For now, this looks like a shakeout, not a breakdown.
