Bitcoin's Rebound Stalls, Range-Bound Trading Persists
According to the latest market analysis from Glassnode, Bitcoin experienced a short squeeze-fueled rebound in mid-August, briefly surpassing the $80,000 mark on August 27. However, the price quickly encountered significant resistance at long-term supply zones, leading to a swift pullback to around $76,000 and triggering a series of long position liquidations.
Key Price Zones: The Battle Between Resistance and Support
The current market structure presents clear upper and lower boundaries:
- Upper Resistance Zone ($83,000 - $86,000): This range concentrates a large volume of potential short liquidation clusters, forming a substantial technical selling wall.
- Lower Support Zone ($62,000 - $65,000): This area contains an undigested cluster of long liquidations and is also identified by on-chain data as an accumulation zone.
Bitcoin is currently trading between these two critical price bands, lacking clear momentum for a unilateral breakout.
On-Chain Supply Distribution Reveals Shifting Market Pressures
A deeper look into on-chain metrics reveals a notable shift. When Bitcoin traded near $78,000 in May of this year, approximately 65% of the circulating supply was in profit. By late August, with the price back at similar levels, the profitable supply ratio had increased to 68%.
This change stems from supply redistribution over the summer. The average cost basis for short-term holders has been pushed higher to around $71,000. Consequently, the price revisiting $71,000 now activates a larger pool of profitable coins compared to before, increasing potential selling pressure.
Synthesizing cost basis and supply distribution models, the $62,000 to $65,000 range is identified as the current cycle's accumulation and support zone, while $83,000 to $86,000 represents the area where long-term holders begin to provide significant supply (i.e., take profits).
Macro Environment and Market Liquidity Observations
During the August rebound, the 7-day average net inflow for U.S. spot Bitcoin ETFs peaked at $290 million daily. Notably, however, secondary market daily trading volume hovered around $3 billion, significantly lower than the activity seen during the earlier market expansion phase this year.
The macro backdrop sends mixed signals. The U.S. 10-year Treasury yield briefly dipped to 4.6% following the Treasury's buyback announcement on August 19 but rebounded to 4.8% within just eight trading sessions, hitting a new high for this cycle. This indicates persistent pressure in sovereign debt markets, continuing to influence valuations of risk assets, including cryptocurrencies.
Options Market Positioning Hints at Future Volatility Anchors
In derivatives markets, short-term optimism has cooled, but demand for longer-dated options remains firm. The open interest for quarterly options expiring on September 25 is approximately $14 billion, with a significant concentration of strikes above $80,000. These large positions are likely to serve as important anchors for market volatility and price action in the coming weeks.
Glassnode concludes that Bitcoin is likely to remain range-bound until the supply pressure above $83,000 to $86,000 is effectively absorbed. Traders may view $62,000 to $65,000 as the primary downside reference area, while a sustained upside breakout would require consistent volume and clearing of the dense overhead resistance.