Bitcoin continues to capture the attention of investors and analysts alike, particularly as it grapples with significant price resistance levels. After peaking at a weekly high of $88,752 on March 24, Bitcoin (BTC) has exhibited a trend of lower highs and lower lows, particularly in the 1-hour time frame. As the week draws to a close, the cryptocurrency appears unable to breach the $88,000 resistance, diminishing the likelihood of retesting the $90,000 mark before the end of the first quarter.
What is Keeping Bitcoin Under $90K?
A primary factor stalling Bitcoin’s price movement is persistent sell-side pressure, predominantly from short-term holders (STHs), who are individuals holding their coins for less than 155 days. According to Glassnode’s “The Week On-chain” newsletter, this current Bitcoin cycle is marked by a ‘top-heavy’ market where many investors who purchased BTC at inflated prices continue to hold significant portions of Bitcoin’s supply. This phenomenon leaves short-term holders particularly vulnerable to price drawdowns, especially following the recent 30% correction from Bitcoin’s all-time high.
“Volume of Short-Term Holder supply held in loss surging to a massive 3.4M BTC. This is the largest volume of STH supply in loss since July 2018.”
This selling pressure is clearly reflected in Bitcoin’s accumulation trend score. This metric, which quantifies selling pressure, has remained below 0.1 since Bitcoin’s price declined from $108,000 to the $93,000-$97,000 range. A score under 0.5 suggests distribution rather than accumulation, highlighting substantial selling pressure experienced in the market.
Furthermore, liquidity conditions have tightened, with data indicating that on-chain transfer volumes have plunged to $5.2 billion daily—a steep 47% decline from the highs observed during previous market rallies. The active address count has similarly diminished by 18%, falling from 950,000 in November 2024 to 780,000. Additionally, the open interest (OI) in the BTC futures market has decreased by 24%, from $71.85 billion to $54.65 billion, indicating that perpetual futures funding rates have also cooled off. This combined effect of deleveraging and liquidity contraction hampers the market’s ability to sustain a rally past the $90K threshold, as insufficient buy orders are present to absorb the sell orders.
New Demand for Bitcoin Continues to Fall
Equally concerning is the lack of new demand for Bitcoin. Glassnode’s data indicates that the current bullish cycle of BTC faces significant headwinds due to a dwindling influx of new buyers. The Cost Basis Distribution (CBD) Heatmap reflects a concentration of supply at elevated price levels (between $100K-$108K), with little market activity at lower levels needed to catalyze a price recovery.
These conditions have been exacerbated by broader macroeconomic uncertainties, dissuading potential new investors. Notably, capital has transitioned to net outflows whenever the short-term holder cost basis for one week dropped below the one-month to three-month cost basis.
“The flip side of these observations is that the Long-Term Holder cohort still retains a substantial portion of the network wealth, holding almost 40% of invested value.”
While the current market outlook may seem bleak, persistent accumulation by long-term holders might eventually lead to a constriction in supply, paving the way for an uptick in demand once a robust uptrend is established.
This article does not contain investment advice or recommendations. Every investment and trading move carries risks, and readers are encouraged to conduct their own research prior to making any decisions.
