Bitcoin struggles to regain momentum amid persistent overhead supply: Glassnode

Bitcoin’s BTC early-January breakout attempt has faltered, with prices slipping back below $90,000 after failing to clear a dense band of overhead supply that analysts have flagged as a key structural constraint.

After showing signs of seller exhaustion at the turn of the year, bitcoin rebounded toward the upper end of its multi-month range, briefly trading near $98,000 last week. That move, however, stalled as BTC’s price approached the cost basis of recent buyers, where a large pool of investors appeared willing to sell into strength, according to a new report from onchain analytics firm Glassnode.

Glassnode said the rejection near the short-term holder cost basis around $98,000 mirrors market behavior seen in early 2022, when repeated failures to reclaim recent buyers’ breakeven levels prolonged consolidation. "Supply overhang persists, as recent buyers continue to face overhead resistance, constraining upside follow-through and keeping rallies vulnerable to distribution," the firm’s analysts said.

Onchain data suggests that much of the selling pressure has come from investors who accumulated bitcoin between early and mid-2025 and are now exiting positions as the price revisits their entry range.

Loss realization has been dominated by holders in the three-to-six-month cohort, while profit-taking has increasingly been driven by traders locking in relatively thin gains rather than holding for trend continuation. Per Glassnode, this pattern is synonymous with transitional, low-conviction markets.

Cautious tone

Yet, spot market conditions have improved modestly. The analysts noted that sell-side pressure across major exchanges has eased, with cumulative volume delta turning more buy-dominant and Coinbase-led selling slowing after months of distribution.

Still, Glassnode has retained a cautious stance on market optimism. The firm stated accumulation remains selective rather than aggressive, falling short of the sustained demand typically associated with durable trend expansion.

Institutional and corporate demand has also remained uneven. Corporate treasury activity has been sporadic and event-driven, leaving it a marginal source of support, while derivatives participation has stayed thin, with futures volumes compressed and leverage deployment subdued. Options markets have reflected the same caution, with volatility repricing concentrated at the very front end of the curve and little change in medium- or long-dated expectations, the analysts said.

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The failed breakout has coincided with renewed macro pressure. Bitcoin fell back below $90,000 this week as global markets repriced risk following turmoil in Japanese government bonds and escalating geopolitical tensions, triggering more than $1 billion in liquidations.

At the same time, U.S. spot bitcoin and ether ETFs reported nearly $1 billion in combined outflows, reversing last week’s inflows and underscoring fragile sentiment among institutional allocators.

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However, the analysts argued against reading the pullback as a decisive breakdown. Rather, Glassnode characterized the current phase as a pause driven by limited participation, where price is being shaped more by the absence of conviction than by aggressive positioning.

"The market appears to be quietly building a base," the firm said, with consolidation unfolding as investors wait for a clearer catalyst to absorb overhead supply and re-engage demand. Bitcoin changed hands near $89,900 ahead of today's U.S. market open, The Block's BTC price page shows.