Bitcoin at $96K: Navigating Familiar Resistance and Derivatives Dynamics (Glassnode Analysis)
Bitcoin’s recent surge past $96,000 has brought it face-to-face with a well-known challenge: a significant zone of overhead supply. According to the latest Week On-chain report from Glassnode, this area has historically capped rallies since November 2025. While the price movement appears positive on the surface, Glassnode emphasizes that the rally remains heavily reliant on derivatives positioning and liquidity conditions, rather than sustained accumulation from spot buyers. This analysis delves into the key findings of the report, exploring the implications for Bitcoin’s future trajectory and potential risks.
The $93K - $110K Supply Zone: A Critical Test
Glassnode’s core argument centers around Bitcoin’s rally directly into a historically important band of long-term holder (LTH) cost basis. This cluster, built between April and July 2025, represents a period of sustained distribution near cycle highs. The report identifies a “dense cluster” spanning approximately $93,000 to $110,000, where previous rebounds have repeatedly stalled, particularly around the lower boundary.
“This region has consistently acted as a transition barrier, separating corrective phases from durable bull regimes,” Glassnode wrote. “With price once again pressing into this overhead supply, the market now faces a familiar test of resilience, where absorbing long-term holder distribution remains a prerequisite for any broader trend reversal.” Essentially, the market is revisiting a known sell ceiling, and overcoming it requires genuine absorption of supply, not just temporary price probing.
Long-Term Holder (LTH) Cost Basis Distribution
The following heatmap illustrates the distribution of long-term holder cost basis, highlighting the density of supply between $93K and $110K:
Source: Glassnode
Short-Term Holder (STH) Cost Basis as a Confidence Gauge
Beyond LTHs, the report also highlights the short-term holder (STH) cost basis at $98,300. This metric serves as a gauge of confidence among newer buyers. Sustained trading above this level would indicate that recent demand is strong enough to keep late entrants profitable while simultaneously absorbing the existing overhead supply.
Bitcoin Short-Term Holder Cost Basis
The chart below visualizes the STH cost basis:
Source: Glassnode
LTH Behavior: Slowing Distribution, But Still Selling
On-chain data reveals that long-term holders remain net sellers, with the total LTH supply continuing to decline. However, the rate of decline has “slowed materially” compared to the aggressive distribution observed in the third and fourth quarters of 2025. This suggests that profit-taking is ongoing, but with reduced intensity.
“What follows will depend primarily on the demand side’s ability to absorb this supply, particularly from investors accumulated over Q2 2025,” the report stated. “Failure to hold above the True Market Mean at ~$81k, in the long term, would significantly increase the risk of a deeper capitulation phase, reminiscent of the April 2022 to April 2023 period.” This is a crucial downside conditional: a break below the long-run mean significantly increases the probability of a more severe market correction.
Net Realized Profit and Loss: A Cooler Distribution Regime
The Net Realized Profit and Loss of Long-Term Holders reflects a “markedly cooler distribution regime.” LTHs are currently realizing approximately 12.8K BTC per week in net profit, a substantial decrease from cycle peaks exceeding 100K BTC per week. While this moderation doesn't eliminate capitulation risk, it suggests that the most intense phase of profit-taking has subsided.
Uneven Demand: Institutional Reset and ETF Flows
Off-chain indicators present a more constructive picture. Glassnode argues that institutional balance sheets have “gone through a full reset” after months of heavy outflows across spot ETFs, corporate treasuries, and sovereign entities. Net flows are now stabilizing, indicating that sell-side pressure is diminishing. Spot ETFs are identified as the first cohort to turn positive again, re-establishing themselves as the primary marginal buyers.
However, corporate and sovereign treasury flows are described as sporadic and event-driven, rather than consistent. This means that balance sheet demand can help stabilize prices, but may not yet provide a sustained growth engine, leaving short-term direction more susceptible to derivatives positioning and liquidity conditions.
DAT Netflows
Source: Glassnode
Improving Spot Behavior: Binance, Coinbase, and Exchange Flows
At the venue level, Glassnode notes improving spot behavior. Binance and aggregate exchange flow measures have shifted back into buy-dominant regimes. Coinbase, previously a consistent source of sell-side aggression during consolidation, has “meaningfully slowed its selling activity.” This is considered a constructive structural shift, although it still falls short of the persistent, aggressive accumulation typically associated with full trend expansions.
Liquidity and Volatility: A Cautionary Note
The most significant caution in the report is that the move into the $96K region was “mechanically reinforced” by short liquidations in a relatively thin liquidity environment. Futures turnover remains well below the elevated activity seen throughout most of 2025, implying that it took comparatively little capital to force shorts out and push the price through resistance.
“This indicates that the breakout occurred in a comparatively light liquidity environment, where modest positioning shifts were able to drive disproportionately large price responses,” Glassnode explained. “In practical terms, it did not take significant new capital to force shorts out of the market and lift price through resistance.” The implication is that continuation now hinges on whether spot demand and sustained volume can replace forced covering once the squeeze impulse fades.
Options Market Dynamics
Options markets add another layer of complexity. Glassnode describes implied volatility as low but “deferred,” while skew continues to price downside asymmetry, with 25-delta skew biased toward puts in mid and longer maturities. This suggests that participants are comfortable holding exposure but remain unwilling to do so without downside protection.
Cumulative Volume Delta Bias
Source: Glassnode
Positioning at the microstructure level is also important. The report flags dealers as short gamma around spot, with a zone roughly from $94K to $104K. In this scenario, hedging flows can amplify moves rather than dampen them, potentially accelerating price travel toward key strikes like $100K if momentum persists.
At the time of writing, BTC is trading at $96,334.
Disclaimer: This analysis is based on the Glassnode Week On-chain report and should not be considered financial advice. Cryptocurrency investments are inherently risky, and investors should conduct their own research before making any decisions.
Keywords: Bitcoin, BTC, Glassnode, on-chain analysis, derivatives, liquidity, long-term holders, short-term holders, overhead supply, market analysis, crypto market, Bitcoin price prediction.