Blockchain analysis agency Glassnode warned in its latest report that if Bitcoin wants to avoid the risk of a year-end decline, the price must return to and maintain in the $96,100 to $106,000 area. Data shows that more than 25% of the Bitcoin supply is currently in the red, and the market is facing higher-than-usual potential selling pressure. The derivatives market showed risk aversion, with open interest in futures declining, funding rates reset to neutral, and options implied volatility compressed.
$96,100 to $106,000: The Life-Deadline for Supply Cluster Cost Basis
! Bitcoin Supply Cluster Cost Base Model
(Source: Glassnode)
To repair the damaged market structure and mitigate the risk of further declines towards the end of the year, Glassnode has pointed to a key price zone. According to the report’s analysis, from data tracking the cost basis of supply clusters, Bitcoin must return to and maintain the quantile region of 0.75 to 0.85, which is between $96,100 and $106,000. If the price fails to reclaim and hold this area by the end of the year, the downside risk to the market will increase significantly.
Why is this price range so critical? The supply cluster cost base model tracks the cost distribution of Bitcoin holders within different price ranges. The $96,100 to $106,000 range represents a concentrated cost zone with a large amount of chips, often opting to add to or hold firmly when prices fall near cost, creating buying support.
The meaning of the 0.75 to 0.85 quantile is that 75% to 85% of Bitcoin holders cost less than this range, and only 15% to 25% cost more. When the price falls below this range, it means that more than 25% of the supply is in the red, and these losing chips are under pressure from stop-loss or panic selling. Once the sell-off begins, it can trigger a chain reaction, driving the price to accelerate its decline.
Conversely, if the price can return and stabilize within this range, it will compress the loss supply ratio below 25%, and market sentiment will shift from panic to stability. More importantly, a reclaim of this range will attract buyers waiting for confirmation, forming a positive cycle. From a technical analysis perspective, $96,100 is close to the round number mark of $10K, a psychological level that has a strong magnetic attraction effect in itself.
Three major support logics for Bitcoin’s key price zones
Cost Base Concentration: $96,100-106,000 is the cost zone for a large number of chips, with holders motivated to defend
Quantile Threshold: The 0.75-0.85 quantile is a critical threshold for the proportion of losing supply
Psychological Threshold: The $10M integer number has strong market consensus and appeal
Glassnode emphasizes that unless there are external macroeconomic shocks to upset the current balance, the market will continue to operate in this fragile structure. In the absence of a new wave of strong demand injection, investors need to pay close attention to the gains and losses of the above key price areas to judge the subsequent market trend. This analytical framework provides traders with a clear reference for risk management: if the price consistently falls below $96,100, they should consider reducing their positions; If it successfully stands above $106,000, consider adding to the position.
25% loss supply is ominously similar to Q1 2022
! Bitcoin Loss Supply
(Source: Glassnode)
In its report, Glassnode specifically noted that Bitcoin’s current market structure is quite similar to that of the first quarter of 2022. The data shows that more than 25% of the Bitcoin supply is currently in the red, indicating that the market is facing higher-than-usual potential selling pressure. This historical comparison is very cautionary, because the first quarter of 2022 was the starting point for Bitcoin to collapse from $4.7 and finally hit the bottom of the bear market of $1.5 in November of that year.
The 25% loss supply ratio is a critical market psychology threshold. When the losing supply is below 20%, the market is usually in a relatively healthy state, with most holders having a profit buffer and low willingness to sell. When the losing supply exceeds 30%, the market has usually entered a deep bear market, and panic selling can break out at any time. The current 25% level is in a critical range, and the market may either repair upwards or collapse downwards.
Glassnode analysis stated that although the Bitcoin market structure is fragile, capital momentum is still positive, which provides a certain degree of support for market consolidation and avoids a direct price collapse. Capital momentum refers to the speed and scale of new capital flowing into the market, as long as there is still new capital entering the market, even if the market structure is fragile, it will not collapse immediately. This “fragile but not broken” state is the most accurate description of the current market.
However, the report also specifically mentioned that the current momentum of capital inflows has weakened significantly compared to the peak in mid-2025, indicating a lack of strong upward momentum in the market. When Bitcoin hits an all-time high of $12.6M in mid-2025, daily capital inflows will reach billions of dollars. The current capital inflows, while still positive, have shrunk significantly, and this diminishing momentum is the root cause of the difficulty of sustained price increases.
The similarity between Q1 2022 and the current one lies not only in the ratio of losing supply but also in market sentiment and the macro environment. At the beginning of 2022, the Fed had just begun its interest rate hike cycle, tightening market liquidity and putting pressure on risk assets. Although the Federal Reserve has begun to cut interest rates, the pace of interest rate cuts is slower than expected, and there is still a risk of a rebound in inflation, and the macro environment is also not conducive to risk assets. This dual pressure on macro and micro makes the similarity between the current market and the beginning of 2022 not just a coincidence.
ETF turns negative and CVD declines demand side collapse
! Cumulative Spot Trading Volume Increment on Exchanges
(Source: Glassnode)
On the demand side, the Bitcoin spot market is showing signs of weakness. Glassnode observed that the flow of funds to Bitcoin spot ETFs in the United States has turned negative, and the cumulative trading volume increment (CVD) of major exchanges has also shown a downward trend. Together, these indicators signal weakening market demand, indicating that institutional and retail investors lack the willingness to actively buy at current prices.
Negative ETF flows are a particularly alarming signal. Bitcoin spot ETFs have been the most significant driver of Bitcoin’s price increase since their launch in January 2024. As ETFs continue to attract inflows, Bitcoin prices rise steadily. But when ETFs start to see net outflows, it means that institutional investors are reducing their exposure to Bitcoin, which often signals a price correction or trend reversal.
CVD (Cumulative Volume Delta) is a measure of the balance of buying and selling forces. When CVD rises, it indicates that active buying is stronger than active selling; When CVD decreases, it indicates that active selling is dominant. The CVD of major exchanges has reversed downward at the same time, which means that the spot market around the world is experiencing a process of increased selling pressure and weakening buying order. This global demand recession is more alarming than fluctuations in a single market.
The negative ETF and the decline in CVD have formed a double confirmation of the demand side. Institutions reduce their positions through ETFs, retail investors sell through exchanges, and both buyers and sellers are reducing their Bitcoin holdings. In this environment of demand vacuum, any negative news could trigger an accelerated price decline. This is why Glassnode emphasizes the need to hold key price zones, as technical support levels become the only line of defense in the absence of demand support.
Gamma Squeeze Risk of Options Pricing Misalignment
! Bitcoin Options Implied Volatility and Skewness
(Source: Glassnode)
In response to the dynamics of the derivatives market, Glassnode reported that the number of open interest in Bitcoin futures is declining, and the funding rate has been reset to neutral. The funding rate has turned neutral, reflecting that traders are now taking a risk-off stance, and excessive leveraged long positions in the market have been largely closed. This deleveraging process is healthy in the short term, eliminating the risk of forced liquidations triggering a cascading decline.
In terms of the options market, Glassnode observed a compression of implied volatility (IV), a flattening of skew (Skew), and a shift in capital flow from simply buying put options (short options) to a more cautious sell call (call option) strategy. This change in the options market reflects a decline in market expectations for extreme volatility, with traders no longer actively buying protective puts.
It is worth noting that the current options market pricing appears to be undervalued, as the actual volatility that occurs has exceeded the implied volatility priced by the market. This pricing misalignment puts pressure on traders shorting Gamma, potentially triggering additional hedging needs if the market experiences significant volatility. When option sellers find that the actual volatility exceeds pricing expectations, they need to hedge their risk by buying and selling the underlying asset, which in itself amplifies market volatility and creates a gamma squeeze effect.
Based on the above analysis, Glassnode believes that the current market environment is still quite fragile. Although the price has temporarily stabilized above the key support level, the overall situation still depends on whether Bitcoin can hold the key cost base area. In the absence of a new wave of strong demand injection, investors need to pay close attention to the gains and losses of the above key price areas to judge the subsequent market trend.
