Bitcoin (BTC) has once again found itself stuck below the critical $90,000 resistance level, failing to sustain momentum despite repeated attempts. Since hitting a weekly high of $88,752 on March 24, BTC has formed a series of lower highs and lower lows on the 1-hour chart, signaling weakening bullish momentum. As the quarter draws to a close, the chances of testing $90,000 before Q1 ends are diminishing.
This persistent struggle isn’t due to a single factor but rather a combination of structural market dynamics — from excessive overhead supply to shrinking liquidity and a noticeable absence of fresh demand. Let’s explore the three primary reasons behind Bitcoin’s stalled breakout.
1. Heavy Overhead Supply and Short-Term Holder Selling Pressure
One of the most significant headwinds for Bitcoin’s price advancement is the intense selling pressure from short-term holders (STHs) — investors who have held BTC for less than 155 days. According to Glassnode’s latest Weekly On-Chain Report, this cycle is defined by a phenomenon known as "highly concentrated holdings at elevated prices."
Many investors bought Bitcoin near its all-time high of $108,000, and with the price now down over 30% from that peak, a large portion of STH supply is underwater.
“The volume of unprofitable supply held by short-term holders has surged to 3.4 million BTC — the largest such cohort since July 2018,” Glassnode analysts noted.
This trapped supply creates continuous sell-side pressure, especially during price rallies. When short-term holders attempt to exit breakeven or minimize losses, even modest upward movements trigger wave-like selling, preventing sustained breakouts.
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This dynamic is further confirmed by Bitcoin’s Net Unrealized Profit/Loss (NUPL) and Cumulative Chain Profit metrics. Currently, only about 2.5% of Bitcoin’s total supply is in profit — an extremely tight margin that limits new buying power. Without a broad base of profitable addresses willing to reinvest, rallies lack staying power.
2. Shrinking Liquidity and Market Deleveraging
Another major obstacle is the contraction in market liquidity across both spot and derivatives markets. When liquidity dries up, even small sell orders can disproportionately impact price — making it harder for bulls to push through resistance zones like $90,000.
On-chain data reveals a sharp decline in transfer volume, now averaging just **$5.2 billion per day** — a 47% drop from previous highs seen during Bitcoin’s run toward $108,000. Concurrently, active addresses have fallen by 18%, dropping from 950,000 in November 2024 to around 780,000 today.
In the futures market, open interest (OI) has declined by 24%, falling from $71.85 billion to $54.65 billion. This reduction signals widespread deleveraging — traders are either closing positions or being liquidated amid heightened volatility.
Additionally, perpetual swap funding rates — a gauge of trader sentiment — have cooled significantly. While positive funding once indicated aggressive long positioning, current neutral-to-slightly-negative rates suggest waning speculative appetite.
Low liquidity combined with reduced leverage creates a fragile environment where breakout attempts often fizzle out quickly. Bulls need strong, consistent buying volume to absorb sell walls at key resistance levels — and right now, that volume simply isn't present.
3. Lack of New Buyer Demand at Current Price Levels
Perhaps the most telling sign of stagnation is the absence of new demand entering the market. Despite Bitcoin trading above $85,000, there’s little evidence of fresh capital inflows from new investors or institutions.
Glassnode’s Cost Basis Distribution (CBD) heatmap illustrates this clearly: supply is heavily concentrated between $100,000 and $108,000, but there's a noticeable gap in ownership at lower price points — particularly below $80,000. This suggests few new buyers stepped in during the correction phase to accumulate at discounted levels.
Without strong support from new entrants, price rebounds rely solely on existing holders re-entering the market — which often leads to short-lived rallies fueled more by hope than fundamentals.
Moreover, macroeconomic uncertainty continues to suppress risk appetite. Rising geopolitical tensions, fluctuating inflation expectations, and delayed rate-cut timelines from central banks have made investors cautious about allocating capital to volatile assets like Bitcoin.
This caution manifests in on-chain capital flows: when the cost basis of 1-week-to-1-month holders falls below that of 1-month-to-3-month holders, it signals net capital outflow — exactly what we're seeing now.
FAQ: Understanding Bitcoin’s Current Price Struggle
Q: Why is $90,000 such an important resistance level for Bitcoin?
A: While not a round psychological number like $100,000, $90,000 represents a confluence of technical and on-chain resistance — including dense sell orders from trapped short-term holders and previous rejection zones. Breaking it could open the path toward new highs.
Q: How do short-term holders impact Bitcoin’s price?
A: Short-term holders are more sensitive to price swings. When they’re underwater, they tend to sell during rallies to cut losses or break even, creating consistent sell pressure that limits upward momentum.
Q: What does low open interest mean for Bitcoin’s future?
A: Low open interest indicates reduced leverage and speculative activity. While this lowers systemic risk, it also means fewer aggressive buyers are backing price moves — making breakouts harder to sustain.
Q: Is this bearish phase permanent?
A: Not necessarily. Historically, periods of consolidation and deleveraging precede stronger bull phases. Once long-term holders reassert control and new demand returns, conditions may improve for a sustainable rally.
Q: Can macroeconomic factors really affect Bitcoin?
A: Yes. Though often seen as "digital gold," Bitcoin remains highly correlated with risk-on assets during uncertain times. Tight monetary policy and economic instability can delay institutional inflows and retail adoption.
The Path Forward: Supply Squeeze Ahead?
Despite current headwinds, there’s a silver lining: long-term holders (LTHs) still control nearly 40% of Bitcoin’s realized value. These investors have historically held through volatility, absorbing sell pressure from weaker hands.
Their continued accumulation suggests confidence in Bitcoin’s long-term outlook. Over time, this behavior can lead to a supply squeeze, where available float diminishes — potentially setting the stage for explosive moves once demand returns.
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Until then, patience is key. Markets don’t advance in straight lines. Corrections purge excess leverage and redistribute supply — laying groundwork for healthier growth ahead.
Final Thoughts: Consolidation Before the Next Leg Up?
Bitcoin’s inability to break $90,000 isn’t a sign of failure — it’s part of a necessary maturation process. The current phase reflects a market digesting past gains while waiting for clearer macro signals and fresh inflows.
With overhead supply heavy, liquidity thinning, and new demand muted, a breakout remains unlikely in the near term. But these conditions often precede powerful moves when reversal finally occurs.
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For now, watch for signs of renewed accumulation, rising open interest, and improving macro sentiment — these will be the true triggers for the next leg upward.