Behind Bitcoin’s $40K Plunge: The Hidden Factor That Crushed the Rally from $124K to $84K
Bitcoin's breathtaking rally hit a wall—and the reason might be simpler than you think.
Forget complex derivatives or macroeconomic shifts for a moment. A deeper dive into on-chain behavior reveals a classic, almost predictable pattern of profit-taking that accelerated the descent. When prices flirt with historic highs, long-term holders start moving coins—and the market feels every satoshi of that sell pressure.
The Mechanics of the Meltdown
It wasn't a single black swan event. The move from $124,000 to $84,000 unfolded as a cascade of realized gains. Large wallets, often labeled 'whales' or long-term investors, began distributing holdings into strength. Each wave of selling met with thinning buy-side liquidity, creating a vacuum that pulled prices lower faster than most algorithms could react.
This isn't malfunction—it's the market working as designed, albeit in a way that vaporizes leveraged positions with terrifying efficiency. A cynical observer might note it's the one financial system where 'taking profits' is both the ultimate goal and the most reliable catalyst for a crash.
What comes next? History suggests these redistributions lay the groundwork for the next cycle, transferring assets to new conviction buyers. The $40,000 shakeout, while brutal, may just be clearing the deck for the next leg up. After all, in crypto, the only thing more certain than a crash is the rebound that makes everyone forget it happened.
A recent CryptoQuant analysis reveals one of the factors behind the recent Bitcoin price collapse, which appears to have stabilized. Notably, after reaching a peak of $126,000 in early October 2025, Bitcoin briefly stabilized around $124,000 following an initial pullback.
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