Bitcoin Retests Key Support Levels Amid 10% Pullback

Bitcoin has experienced a 10% pullback from its September high, revisiting key support levels reclaimed during its August rally. According to Glassnode's November 4, 2026 report, the cryptocurrency is now trading near its True Market Mean of $77,700 and Short-Term Holder Cost Basis of $75,700. These levels represent the average acquisition prices for active investors and recent buyers, respectively, and are critical for maintaining the structural integrity of Bitcoin's breakout.

Short-Term Holders Face Losses

Short-term holders, defined as those who acquired Bitcoin within the past 155 days, have seen their profitability decline sharply. In early October, 97.5% of their holdings were in profit, but this figure has now dropped to approximately 38%. This shift indicates that most recent buyers are holding at a loss, reducing the market's speculative excess compared to the September peak. Should the share of profitable short-term holders recover above 50%, it could signal renewed confidence among newer investors.

Liquidation Risks and Market Positioning

The pullback has cleared much of the long leverage built since August, reducing the risk of forced liquidations. However, a significant band of long liquidation levels remains between $73,000 and $76,000, aligning with key support metrics like the Short-Term Holder Cost Basis and the 200-day moving average. On the other hand, short positions have grown above the current price, with the largest cluster near $87,000. If Bitcoin's price rises, these shorts may need to buy back, potentially fueling upward momentum.

Options Market Signals Upside Potential

The options market reflects a bias toward higher prices into year-end. Open interest for the two largest upcoming expiries, on November 27 and December 25, totals $5.7 billion and $12.5 billion, respectively. The largest call positions for December are concentrated at $80,000, $90,000, $100,000, and $120,000, while the largest puts are positioned at $60,000 and below. This distribution suggests traders are preparing for potential upside, though not all calls represent outright bullish bets, as some may be sold for premium income.

Spot Volume and ETF Trends

Spot trading volume remains elevated at approximately 1.5 times its pre-August breakout level, indicating sustained market interest despite the pullback. However, U.S. spot ETFs have seen nearly $1 billion in net outflows over the past two weeks, including $640 million on November 2. ETF trading volume has averaged $1.3 billion daily since May, down from earlier highs, reflecting limited new capital inflows from traditional investors.

Resilience Against Traditional Assets

Over the past two months, Bitcoin has held its ground against traditional assets, declining about 2% compared to the S&P 500's less than 1% drop. This marks a significant improvement in Bitcoin's relative performance, as it now matches the S&P 500 in half of its trading sessions, a level not seen since March 2025.

Despite the challenges, Bitcoin's ability to maintain elevated trading volumes and absorb the impact of the largest hack in crypto history—a $6.3 billion theft from Binance—suggests resilience. However, the market's reliance on internal capital flows rather than new external demand raises questions about the sustainability of current support levels.