Bitcoin's selling pressure may be easing, as profit-taking among short-term holders has retreated from recently elevated levels back to its yearly average, according to the latest onchain observation. The update was shared by Cointelegraph on October 20, 2026, citing data from onchain analytics firm Glassnode.

The cooling follows a period of unusually heavy activity in which short-term holders moved significant amounts of Bitcoin onto exchanges, contributing to the largest inflows recorded in a year. That surge added pressure to BTC's price as investors rushed to realize gains from their holdings.

UPDATE: Short-term holder profit-taking that drove Bitcoin's biggest exchange inflows in a year and pressured price has now cooled to its yearly average, per @glassnode. pic.twitter.com/zkV0gYLSR5

— Cointelegraph (@Cointelegraph) October 20, 2026

Exchange Inflows Slow After Heavy Selling Pressure

The earlier surge in short-term holder profit-taking coincided with a marked increase in BTC moving onto cryptocurrency exchanges. Exchange inflows are closely watched because investors frequently transfer Bitcoin to trading platforms before selling. When large quantities of BTC arrive on exchanges during a period of uncertainty, the additional potential supply can weigh on market sentiment.

Exchange deposits, however, do not always result in completed sales. Some transfers involve custody changes, internal wallet movements, or other operational activities rather than outright selling.

The reported return of short-term holder profit-taking to its yearly average suggests that the unusually intense wave of realized gains has moderated. Benchmarking current activity against a yearly average is a common convention in onchain research, helping analysts separate abnormal spikes from routine levels rather than interpreting any single reading in isolation. This may reduce the immediate pressure created by investors rushing to lock in profits. Still, returning to an annual average does not mean profit-taking has stopped entirely — it indicates that activity has moved closer to its typical level over the measured period.

Short-Term Holders as a Sentiment Gauge

In onchain analysis, short-term holders are generally defined as investors who have held Bitcoin for less than approximately 155 days. Because these coins were acquired at more recent prices, whether short-term holders spend them at a profit or a loss is widely read as an indication of how newer market participants are responding to prevailing conditions. This group tends to react more quickly to price fluctuations than long-term holders, which makes their selling activity an important indicator of short-term market sentiment. The recent decline in profit-taking suggests that one source of selling pressure may be easing.

What Cooling Profit-Taking Means for BTC

The slowdown in short-term holder profit-taking could provide some relief for Bitcoin's price recovery. When fewer investors are aggressively realizing profits, buyers may face less selling pressure in the spot market, creating more favorable conditions for price stabilization — particularly if demand begins to strengthen.

Reduced selling alone, however, is not enough to guarantee a sustained rally. Bitcoin still needs consistent buying interest to absorb available supply and support higher prices. Traders may watch spot market demand, exchange balances, and accumulation among different holder groups for additional confirmation. A renewed increase in short-term holder selling could also reverse the improvement. Read together, these metrics can help clarify whether the calmer selling environment persists.

Notably, the latest observation does not provide an exact BTC volume for either the earlier exchange inflow surge or the current profit-taking level. As a result, the extent of the decline cannot be independently quantified from the information available.

For now, Bitcoin's short-term holder selling pressure appears to have normalized after an unusually intense period. That development may help the market regain stability, although the strength of any recovery will ultimately depend on whether buyers return in sufficient numbers.

Source: CoinoMedia