Bitcoin Seller Exhaustion: Is BTC Preparing for Its Next Rally?
Bitcoin fell to $80,117 on October 15 before recovering to around $82,000 within days, despite pressure on risk assets from inflation concerns and a sell-off in AI stocks. The rebound has drawn attention to a central question dominating market discussions and crypto hot topics: could Bitcoin be approaching a turning point?
Richard Byworth, managing partner at BYZ Partners and a former Syz Capital strategist, believes record levels of seller exhaustion could signal that a rally is approaching. But with Bitcoin still well below its previous all-time high, uncertainty remains over whether the market has enough momentum to sustain a recovery.
Is Bitcoin's next rally getting closer, or could further downside lie ahead? Recent market data offers clues to what may happen next.
What Is Bitcoin Seller Exhaustion and How Is It Measured?
Bitcoin seller exhaustion can offer clues about whether selling pressure is beginning to ease. But what does it actually mean, how do analysts measure it, and can it help identify when Bitcoin is nearing a market bottom?
What Does Bitcoin Seller Exhaustion Mean?
Bitcoin seller exhaustion occurs when selling pressure begins to ease as fewer holders are willing to sell at current prices. However, it does not mean all potential sellers have left the market or that a price recovery is guaranteed.
Imagine a market where sellers keep lowering their prices to attract buyers. Eventually, fewer may be willing to accept even lower offers, reducing the pressure to sell. But for prices to rise, buyers must be willing to step in and create enough demand.
How Does Glassnode’s Seller Exhaustion Constant Work?
Glassnode’s Seller Exhaustion Constant helps analysts assess whether market conditions resemble periods when Bitcoin may be approaching a bottom. Developed by ARK Invest and David Puell in 2021, it combines two measures: the percentage of Bitcoin’s supply in profit and its price volatility over 30 days.
A lower reading can reflect a market where many holders are facing losses while price movements remain relatively calm. This combination has been associated with potential market bottoms, as selling pressure may be easing. However, the indicator cannot confirm that Bitcoin has reached its lowest price or predict when a recovery will begin.
Is Seller Exhaustion the Same as a Bitcoin Bottom?
No. Seller exhaustion can suggest that selling pressure is fading, but it cannot confirm that Bitcoin has reached its lowest price. In August 2026, Glassnode reported that its Seller Exhaustion Constant remained above the levels seen at previous bear-market bottoms, leaving the historical signal unconfirmed.
The distinction is important: fewer sellers do not automatically mean more buyers. A lasting recovery still depends on demand returning strongly enough to support higher prices.
What Is Bitcoin On-Chain Data Showing in October 2026?
Bitcoin’s on-chain data shows a market that has weathered heavy selling but has yet to attract enough new demand for a sustained recovery.
Three areas matter most: Bitcoin’s position in the current cycle, changes in selling pressure, and the price levels that could shape its next move.
Where Is Bitcoin Trading Compared With Its 2026 Low and All-Time High?
Bitcoin is trading near $82,000, well above its June 2026 low of around $58,000 but still far below its October 2025 record of approximately $126,251. The recovery from June suggests the market has regained some ground, but the latest pullback shows that a lasting uptrend is not yet assured.
Glassnode’s October 19 market report also noted that Bitcoin had remained above $80,000 during the latest period of consolidation.
What Does Recent On-Chain Data Say About Bitcoin Selling Pressure?
Glassnode’s data points to a meaningful reduction in loss-selling. Long-term holders’ realized losses fell about 85% from their August 12 peak. Meanwhile, coins moved at a profit outnumbered those moved at a loss by roughly four to one, a shift that has also appeared during previous bull markets.
These are encouraging signs, but they do not confirm a bottom. Glassnode reported on October 19 that selling pressure had eased while spot-market and ETF buyers had yet to return in force. Without stronger demand, Bitcoin may struggle to sustain a recovery.
Which Bitcoin Price Levels Matter Most Right Now?
Three price levels stand out in Glassnode’s October analysis. Around $81,500, the US spot Bitcoin ETF cost basis provides a reference for the average price at which recorded capital entered these funds.
Below it, the True Market Mean near $78,000 tracks the average cost basis of Bitcoin acquired on secondary markets. Both levels could act as support if buyers step in to defend them.
Above the current price, $88,000 is a key resistance level. Glassnode estimates that investors who bought Bitcoin six to twelve months ago have an average cost basis near this price. Some may sell if Bitcoin returns to their break-even point, adding pressure on the way up. A sustained move above $88,000 would suggest the market is absorbing some of that selling pressure.
If Bitcoin falls below $80,000, the True Market Mean near $78,000 could become the next important level to watch.
Why Does Richard Byworth Expect the Next Bitcoin Rally?
Richard Byworth believes Bitcoin could be approaching another rally as selling pressure eases and corporate demand continues. His argument connects two developments: on-chain signals that suggest holders are selling less and growing interest in financial products built around corporate Bitcoin holdings. But how strong is the case for a recovery?
Who Is Richard Byworth, and Why Does He Expect Bitcoin to Rally?
Richard Byworth is managing partner at BYZ Partners and previously worked at Syz Capital, focusing on financial structuring. In an October 19, 2026, interview with Bitcoin Magazine, he argued that Bitcoin’s seller exhaustion had reached record levels, making another rally a matter of time.
He considers $58,000 a likely cycle bottom and believes Bitcoin could set a new all-time high before the end of 2026. These are his market views, not confirmed outcomes.
Beyond easing selling pressure, Byworth sees another potential catalyst for Bitcoin: growing demand from companies accumulating BTC and developing investment products around their holdings.
How Could Bitcoin Treasury Companies Support the Next Rally?
A Bitcoin treasury company holds Bitcoin as a major reserve asset. Strategy held 848,517 BTC at an average purchase price of $75,446 as of October 19, while Strive reported holdings of 36,818 BTC after buying 4,045 BTC during the week of October 12 to 16. These purchases show that some companies continue accumulating Bitcoin despite recent price weakness.
Byworth also argues that Strategy’s digital credit products, which offer investors income through securities supported by its Bitcoin-heavy balance sheet, could compete with traditional bonds for capital. With the 10-year US Treasury yield around 5.1% in mid-October, he sees an opportunity for these products to attract investors seeking alternative sources of income.
If that capital supports further Bitcoin purchases, it could strengthen demand. However, the outcome depends on investor appetite, risk and confidence in the products’ yields.
What Do Other Analysts Say About Bitcoin’s Rally Prospects?
Other market signals offer some support for Byworth’s view, but they also highlight the uncertainty. CryptoQuant analyst Axel Adler Jr. reported that long-term holder balances fell on 13 of the previous 15 days in the October 6 to 10 reading, the highest in a year.
By October 19 the figure had eased to 10, and holdings rose by 40,000 BTC over three days. Adler treats about 7 of 15 as the normal level.
However, not all analysts interpret Bitcoin’s recovery as evidence of a lasting reversal. Naeem Aslam of Zaye Capital Markets argued that the rebound reflected improving liquidity expectations rather than confirmation of a sustained uptrend.
Ultimately, easing selling pressure and continued corporate purchases may support a rally, but Bitcoin still needs stronger, sustained demand to establish a durable recovery.
What Could Delay Bitcoin’s Rally, and What Should Traders Watch?
Bitcoin’s easing selling pressure offers a reason for optimism, but it does not guarantee a sustained recovery. Inflation, investor demand and upcoming decisions could still influence its next move.
How Could Inflation and Fed Policy Pressure Bitcoin?
US inflation rose to 3.7% in September, above the 3.6% forecast, while producer prices jumped 1.3% over the month. The 10-year Treasury yield remained above 5%, and Brent crude traded near $110 a barrel on October 20.
Higher inflation and borrowing costs can make investors more cautious about riskier assets such as Bitcoin. The Federal Reserve already raised rates in September, but markets were pricing in only about a 12% chance of another hike on October 28. A pause could support sentiment, while renewed inflation pressure could delay a recovery.
Are Bitcoin ETF Flows Confirming a Market Bottom?
Investor flows remain mixed. US spot Bitcoin ETFs attracted roughly $2.7 billion in net inflows between September 21 and October 6, before demand reversed. The funds recorded about $229 million in net outflows during October 12–16 alone, following heavy withdrawals earlier in the month.
On October 19, however, they drew another $526.7 million. This rebound is encouraging, but sustained inflows would provide stronger evidence that demand is returning.
Strategy also faces a potential removal from MSCI equity indexes. The final list is due November 11, with changes taking effect after market close on November 30. JPMorgan estimated that removal could trigger about $2.8 billion in selling of MSTR shares by funds tracking the indexes. This concerns Strategy’s stock, not a forced sale of the Bitcoin it holds.
Conclusion
Bitcoin is showing signs that selling pressure is easing, with long-term holders realizing fewer losses and corporate buyers continuing to accumulate BTC. Richard Byworth believes these conditions could set the stage for another rally, but the recovery still needs stronger, sustained demand to confirm a change in trend.
Inflation, Federal Reserve policy, ETF flows and the upcoming MSCI decision could all influence market sentiment in the weeks ahead. For traders, $80,000 remains an important level to watch, alongside the $81,500 ETF cost basis and resistance near $88,000.
Bitcoin may be approaching a turning point, but seller exhaustion alone cannot confirm a market bottom. Whether the next rally materializes will depend on buyers returning in sufficient strength to absorb selling pressure.
FAQs
What is Bitcoin seller exhaustion?
Bitcoin seller exhaustion occurs when selling pressure begins to ease as fewer holders are willing to sell at current prices. It may signal a potential market bottom but does not guarantee a rally.
Does Bitcoin seller exhaustion mean BTC has reached its bottom?
No. Seller exhaustion suggests selling pressure may be fading, but Bitcoin can fall further if demand remains weak or broader market conditions deteriorate.
Is Bitcoin expected to rally in 2026?
Richard Byworth believes Bitcoin could reach a new all-time high before the end of 2026. However, this remains a prediction, and a sustained rally depends on stronger demand and market conditions.
What Bitcoin price levels should traders watch in October 2026?
Traders can watch $80,000 as a key psychological level, around $81,500 as the estimated spot Bitcoin ETF cost basis, and $88,000 as potential resistance.
How do Bitcoin ETF flows affect BTC’s price?
ETF inflows can signal stronger investor demand for Bitcoin, while outflows may indicate weakening interest or selling pressure. Sustained inflows can support a recovery but do not guarantee higher prices.
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