Bitcoin’s latest surge has carried the market bellwether back above the psychologically Bitcoin clears $120K mark, reigniting the debate around whether the next leg of the cycle is underway. Spot moves are only half the story, though.
Beneath the price chart, on-chain data—from accumulation trend scores to exchange balances and long-term holder behavior—is flashing signals that often accompany the early stages of a renewed BTC accumulation phase. In this deep dive, we’ll unpack what clearing $120K means, how the on-chain backdrop has evolved after the 2024 halving, and what traders and long-term investors can reasonably expect as the fourth quarter unfolds.
After spending weeks consolidating, Bitcoin broke above $120,000 again as October kicked off, with multiple outlets noting the move and a pickup in derivatives activity. CoinDesk reported BTC “surged past $120,000” while open interest in futures hit a record, underscoring renewed momentum in leverage markets. Barron’s likewise highlighted a run to the highest levels since mid-August, linking the jump to macro expectations. These developments echo July’s push to fresh cycle highs above $120K that Reuters framed as a milestone in Bitcoin’s maturing market structure.
The number itself isn’t magic, but it is a confluence zone: a prior breakout area from July, a round number that anchors trader psychology, and a level around which options dealers frequently cluster open interest. When price reclaims and holds such zones, subsequent rallies can feed on mechanical flows as hedges are adjusted and sidelined capital returns.
The on-chain story: accumulation trend score turns up
One of the cleanest lenses on whether smart money is accumulating BTC is Glassnode’s Accumulation Trend Score, which scales toward 1.0 when large entities or a broad swath of the network are net buyers over the prior month and toward 0.0 when they’re distributing. In plain English: when the score rises, bigger cohorts are soaking up supply, a hallmark of accumulation phases.
Recent reads and commentary around this metric have pointed to renewed accumulation following summer chop, with industry coverage noting an uptrend through 2025 as larger players added to holdings. While exact real-time values shift daily, the definition and directionality remain consistent: higher scores imply accumulation dominance, often preceding multi-week advances as reduced float meets rising demand.
Exchange balances keep thinning
A second pillar of the accumulation narrative is the drain of BTC from exchanges. When coins flow off platforms, they’re typically headed for self-custody or long-term storage, decreasing immediately tradable supply. Throughout 2025, multiple datasets and reports have tracked multi-year lows in exchange reserves, continuing a downtrend that began in late 2024. The dynamic is intuitive: less supply on exchanges raises the odds that fresh demand moves price more aggressively.
While each provider measures balances differently, the direction—lower exchange reserves amid elevated spot demand—has been widely corroborated, and it’s a textbook ingredient for accumulation phases that set the stage for later expansions in price.
ETF flows and derivatives add fuel
Post-launch U.S. spot Bitcoin ETFs have maintained a powerful gravitational pull on capital, periodically printing headline inflows that help absorb available supply. Recent tallies show the group crossing tens of billions in net inflows, with leadership concentrated among large issuers. Meanwhile, as BTC retook $120K, futures open interest printed new records—evidence of speculative engagement returning in force. Together, persistent ETF bid and rising derivatives intensity represent complementary forces that can compound an on-chain accumulation backdrop.
Halving context: supply issuance is the quiet tailwind
It’s easy to forget the 2024 halving reduced the block subsidy again, lowering new BTC issuance and gradually tightening the structural supply that must be met by demand. As of late September 2025, total circulating supply hovered just under 20 million BTC, with issuance inching toward the 21 million cap. Slower issuance doesn’t cause vertical candles on its own, but it tilts the playing field: when demand pulses—whether via ETFs, treasuries, or retail waves—there’s simply less new supply to sell into it. That mechanical tailwind is a recurring backdrop across past cycles. YCharts
Reading the signals: five on-chain tells that support a new accumulation phase
1) Rising Accumulation Trend Score
As highlighted earlier, a rising Accumulation Trend Score indicates larger balances are adding rather than distributing, typically at a network-wide level. Historically, these rises coincide with price basing or early uptrends, not blow-off tops.
2) Exchange reserves at cycle lows
Lower exchange balances compress tradable supply. Reports through mid-to-late 2025 have chronicled six-year lows in on-exchange holdings, consistent with coins moving to cold storage. In such regimes, even modest demand can move price disproportionately.
3) Long-term holder firmness
Metrics like “supply last active 1+ years” offer a proxy for strong hands. Higher readings imply more coins are dormant; even when that share wobbles during rallies, elevated levels signal a robust long-term holder base reluctant to sell short-term strength. MacroMicro’s long horizon view underscores the relationship between rising dormancy and tightening float in prior cycles.
4) Favorable ETF flow regime
The ETF complex has periodically delivered large net inflows, effectively institutionalizing dollar-cost accumulation. Each positive flow week is another incremental sink for supply, mirroring the effect long-term accumulators have had in past cycles, but via regulated wrappers that can scale with traditional portfolios.
5) Derivatives participation without froth overload
New open-interest highs in futures are often a double-edged sword, but in the context of rising spot and strong on-chain accumulation, they point to a broadening participation rather than late-stage exhaustion. The key is monitoring funding, basis, and liquidations for signs of excessive leverage; for now, the structural message is that participants are re-engaging as spot reclaims key levels.
Price structure: reclaiming $120K to turn resistance into support
From a market-structure standpoint, the July push to new highs above $Bitcoin clears $120K boundary for the summer. When price later dipped and then reclaimed that boundary in October, it created the conditions for a support flip—a classic pattern where prior resistance becomes a launchpad for further advances. Reuters’ July coverage of a $123K print is a useful historical anchor; retaking that region months later strengthens the argument that buyers control the tape unless reclaimed levels fail decisively.
The micro path won’t be linear. After big handles are won back, markets often retest them, washing out weak hands before trending again. In accumulation regimes, those higher-low retests can be gifts to patient buyers, especially if on-chain measures keep improving into the dip.
Also Read; Bitcoin Price Today Blasts Past $113K on ETF Frenzy
Macro currents rates politics, and liquidity
Bitcoin doesn’t trade in a vacuum. This autumn’s narrative has included expectations of U.S. rate cuts, intermittent political headlines, and a tug-of-war between growth data and inflation prints. Barron’s recently tied BTC’s latest push to softer labor data that increased the odds of a Fed cut,
While other reports have flagged the market impact of policy debates and even government shutdown dynamics on risk sentiment. For BTC, the takeaway is straightforward: easier financial conditions and policy clarity tend to loosen risk budgets, which can reinforce underlying accumulation.
Risk check: what would break the accumulation thesis
A sound strategy doesn’t only list tailwinds; it names the invalidations.
First, a sharp reversal in ETF flows could sap the steady bid that has supported price on down days. Sustained net outflows would weaken the case for structural demand. Second, a rise in exchange balances—coins moving back from cold storage—would imply distribution pressure ahead, especially if coupled with rising miner transfers. Monitoring high-frequency exchange flow dashboards can provide early tells.
Third, derivatives overheating (e.g., persistently extreme funding, crowded basis, or record net-long positioning) can flip the script from healthy participation to fragile leverage, raising liquidation risk. CoinDesk’s flag on record open interest is bullish now, but it must be tracked for excess.
Finally, macro shocks—hawkish surprises, growth scares, or regulatory jolts—can overwhelm on-chain positives for stretches of time. The silver lining is that accumulation phases often dull downside impulse because supply is tighter and dips are bought.
Strategy implications: how investors can navigate an accumulation phase
Long-term allocators: lean on the trend, respect the risk
If on-chain signals continue to confirm net accumulation, long-term allocators can add on weakness toward reclaimed supports with the halving-era tailwind at their backs. Dollar-cost averaging into a tightening supply regime remains a time-tested approach—and ETFs make it operationally simple for institutions.
Swing traders: watch the retests and funding
For traders, the playbook focuses on support flips and momentum confirmation. If $Bitcoin clears $120K as support, clean retests with tame funding are attractive. If funding or basis gallops while price stalls, that’s a sign to fade froth or tighten risk.
On-chain watchers: triangulate the signal set
No metric exists in isolation. Triangulate Accumulation Trend Score, exchange balances, long-term holder supply, and ETF flows. Rising accumulation + falling exchange reserves + sturdy LTH supply + positive ETF flows is the four-factor stack that
The bottom line
Bitcoin clears $120K while on-chain accumulation reasserts itself is a powerful combination. It doesn’t guarantee a vertical march, and pullbacks are inevitable. But the market’s microstructure—thinner exchange supply, methodical ETF demand, and post-halving issuance—looks increasingly aligned with the early to mid-stages of an accumulation phase. If these conditions persist, the balance of probabilities favors higher highs into late 2025, punctuated by classic crypto volatility along the way.
FAQs
Did Bitcoin really break above $120,000 again?
Yes. Multiple outlets reported BTC pushing back over $120K as October began, with CoinDesk noting the breakout and record futures open interest alongside the move. Reuters earlier documented a July run to a $123K record, which provides the historical reference for today’s reclaim.
What exactly is the Accumulation Trend Score?
It’s a Glassnode metric that measures whether entities—weighted by balance size—are net accumulating or distributing coins over the last month. Values closer to 1.0 indicate broad or large-entity accumulation; values near 0.0 indicate distribution.
Why do falling exchange balances matter?
When BTC leaves exchanges, it typically moves to long-term storage, reducing immediately tradable supply. Lower on-exchange reserves historically coincide with tighter float and stronger price responsiveness to demand shocks. Recent reports mark multi-year lows in exchange balances.
How do ETFs influence the accumulation phase?
Spot Bitcoin ETFs channel regulated capital into BTC. Periods of net inflows effectively behave like a steady buy-program, absorbing supply and reinforcing on-chain accumulation signals. The group has tallied significant net inflows since launch, led by large issuers.
Is this the start of a blow-off top?
On-chain and flow data lean more toward accumulation than late-stage euphoria. A blow-off typically features surging exchange balances, extreme leverage, and distribution by large holders. Today’s setup—elevated accumulation scores, thin exchange supply, and constructive ETF flows—resembles foundation-building rather than final-stage excess, though conditions can change quickly. Keep monitoring the same signal set for confirmation or deterioration.
