Glassnode says long-term holders who bought Bitcoin between $85,000 and $118,000 could sell into a recovery and cap the rally. Buying interest among newer holders sits lower, around $77,000 to $79,000, while ETF demand remains subdued.
Bitcoin faces significant resistance around $85,000 as long-term holders controlling approximately 4 million BTC, who bought at higher prices, could sell into a recovery, according to Glassnode. The analytics firm published the finding in its weekly onchain report on Wednesday.
Glassnode defines long-term holders as investors who have held Bitcoin for more than 155 days. More than half of the coins in that group were acquired above Bitcoin's current market price, according to the report.
The $84,000 to $85,000 range keeps rejecting rallies
The range has repeatedly rejected recovery attempts this year, and Bitcoin has closed above it on only five days since January. Bitcoin briefly climbed to $87,100 in September but failed to sustain the move.
Glassnode said a series of daily closes above $85,000 would be necessary to establish the area as support. A breakout above $87,500 with stronger ETF inflows could indicate that buyers are absorbing the overhead supply.
Newer holders' supply clusters near $77,000
Conditions look better among investors who bought more recently. Most short-term holders purchased below the current market price, with the largest concentration of supply around $77,000 and another cluster near $64,000.
Binance order book data also showed that buying liquidity has shifted lower. Glassnode found approximately $42 million in bids between $78,000 and $79,000, compared with $24 million in mid-October, while orders around $80,000 fell to $3.4 million.
Investors have also become less willing to realize losses. Daily net realized losses peaked at just $27 million during the October 24 selloff, compared with approximately $630 million at Bitcoin's August low.
ETF inflows stay thin as volatility drops
Institutional demand remains subdued. US spot Bitcoin ETFs recorded just $67 million in net inflows over the two weeks covered by the report, after a $653 million increase on October 19 that was largely reversed by withdrawals, including $540 million on October 22.
Bitcoin has also slipped below the average cost basis of US spot ETF holdings, estimated at approximately $81,500. One-month realized volatility has declined to approximately 25%, returning to levels last seen during summer 2023.
The compression comes ahead of the Federal Reserve's October 28 policy decision, which could provide the next catalyst for a significant market move. Glassnode noted that previous periods of similarly low volatility have preceded sharp price movements in both directions.
Source: Crypto Briefing
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