CryptoQuant says bitcoin correction could be near as traders’ unrealized profit hits 21-month high

Bitcoin could face a near-term correction as short-term traders' onchain unrealized profit margin has reached its highest level in 21 months, according to CryptoQuant.Bitcoin's close above its 365-day moving average last week confirmed a new bull market, CryptoQuant's head of research Julio Moreno said in a Tuesday report. The firm's Bitcoin Bull Score Index also stands at an "extremely bullish" 90 out of 100.However, after bitcoin reached an eight-month high of $87,400, several indicators suggest the rally is losing momentum and a correction could follow, Moreno said.Profit-taking increasesShort-term traders' onchain unrealized profit margin has climbed to 33%, its highest level since December 2024, the report noted.Moreno said margins at similar levels have historically encouraged traders to take profits because more unrealized gains are available to lock in.Bitcoin holders realized 25,700 BTC in profit on Sept. 22, the largest single day of 2026, Moreno noted, adding that the figure confirms that holders were taking profits as bitcoin traded near its recent highs.He said such profit-taking after a strong price rally has historically come before local market tops.Selling signs have also appeared in the altcoin market. The seven-day cumulative number of altcoin inflow transactions rose to 76,000, the highest since Oct. 17, 2025. That date was 11 days after bitcoin reached its previous all-time high, Moreno noted.The number of addresses depositing altcoins on exchanges rose to 51,000 over the same period, its highest level since October 2025. Moreno said the increase was broad rather than being driven by a small number of large wallets."When holders move coins to exchanges, they usually intend to sell," Moreno wrote.Demand coolsBitcoin demand is also slowing across spot and futures markets. Moreno said apparent spot demand has continued to contract, shrinking by 170,000 BTC over the past 30 days. Speculative futures demand growth, which he described as the main driver of the recent rally, slowed from 164,000 BTC on Sept. 14 to 16,000 BTC on Sept. 29."Without fresh demand, rallies struggle to extend," Moreno said. "With spot demand still in contraction and futures growth stalling, near-term upside becomes harder to sustain."Bitcoin support levelsIf bitcoin corrects, Moreno sees the 365-day moving average near $80,000 as the first support level. Further support lies at the 200-day moving average near $71,000 and the trader onchain realized price around $67,000, he added.Moreno said a correction toward these levels would represent a "healthy consolidation" within a young bull market rather than a reversal, as long as the support levels hold."Still a bull market — but showing signs of fatigue," Moreno concluded. "Stretched profit margins, record 2026 profit-taking, exploding altcoin inflows and cooling demand warn of a near-term correction."The Funding newsletter: Stay on top of the latest crypto VC funding and M&A deals, news, and trends with my free bi-monthly newsletter, The Funding. Sign up here!