Short-term holder confidence tested as Bitcoin price enters ‘air-gap’ zone after July peak: Glassnode

Bitcoin’s pullback below $116,000 has pushed the market into a thinly traded “air-gap” zone, with onchain data showing reduced leverage, falling short-term holder profitability, and the biggest spot ETF outflow since April, according to Glassnode’s latest report.

After peaking near $123,000 in mid-July, BTC dropped to about $112,000 on July 31, slicing below a supply cluster with a $116,000 floor. Roughly 120,000 BTC changed hands in the dip, suggesting opportunistic buying, but the price has yet to reclaim the lost support.

Short-term holders are also feeling the pinch during this slump. Coins held for one to three weeks now carry an average cost basis of around $116,900, which has turned into near-term resistance. The share of short-term holders' supply in profit has slipped from 100% to 70%. Glassnode states that it’s a typical mid-cycle level, but also warns of a potential confidence drag if the sell-off deepens.

"The deeper the correction, the more supply is likely to fall into loss, which can slowly erode investor confidence," analysts wrote. "However, given the market is trading within a relatively thin air-gap, the most likely source of this additional supply would be from late-stage profit-taking, should it occur."

Spot ETF demand cooled during a four-day withdrawal streak, marking the largest sell pressure for Wall Street funds in three months. U.S. spot bitcoin ETFs saw an outflow of 1,500 BTC on Aug. 5, the sharpest single-day withdrawal since April. These vehicles returned to net inflows on Wednesday with $91.5 million deployed to funds offered by issuers like BlackRock, Bitwise, and Grayscale. The trend was consistent with previous outflows, which have been brief, while analysts are watching to see if redemptions persist after yesterday’s reversal.

Meanwhile, leverage has deflated as prices print lackluster movements. Funding rates on perpetual swaps have fallen below 0.10 %, signaling traders are unwilling to pay a premium for new leveraged longs. Thirty-day skew on Derive.xyz has flipped negative, echoing the bid for downside protection .

Overall, BTC data paints a picture of “post-ATH indecisiveness.” Onchain metrics show neither a capitulation event nor a confident rebound. Leverage is cooling, ETF flows have wobbled, and only opportunistic spot buyers have stepped in so far. Glassnode calls the current structure “normal for a bull-market correction” but warns that sustained weakness below $116,000 could erode short-term holder confidence and invite a test of $110,000. A decisive move outside that range could set the next trend leg, analysts wrote.

According to The Block's price page , BTC was little changed on Thursday and traded around $114,900.