Bitcoin is beginning to recover from its recent decline, crossing above $90,000 for the first time in a week as market conditions slowly improve.
However, despite the renewed optimism, one key group of investors continues to fuel concerns around liquidity. This lingering pressure is preventing Bitcoin from reestablishing a fully stable upward trend.
Bitcoin Holders Could Present A Threat
Liquidity trends measured through realized profit and loss provide important insight into longer-term market health. The Long-Term Holder (LTH) Realized Profit/Loss Ratio remains above 100x, indicating that long-term holders are still realizing profits rather than losses.
This suggests liquidity remains healthier than during major bottom formations or the stressed market conditions of Q1 2022. As long as LTHs continue to realize profits, Bitcoin retains a layer of structural support.
However, the picture could shift quickly. If liquidity fades and the ratio compresses toward 10x or lower, the risk of entering a deeper bear market becomes difficult to dismiss.
Historically, that threshold has aligned with moments of severe stress across long-term holders. Should LTHs begin realizing losses, it would signal a deterioration in market confidence and a potential reversal in price momentum.
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Bitcoin LTH Realized P/L Ratio. Source: Glassnode
Macro momentum indicators also show signs of cooling stress in the market. Recent patterns reflect clear mean reversion, suggesting that volatility sellers are returning. Even so, implied volatility remains elevated relative to actual market performance.
Glassnode data shows that one-month implied volatility has fallen—dropping roughly 20 vol points from last week’s peak and about 10 points from recent levels—indicating that some of the stress premium is now unwinding.
The decline in implied volatility, combined with easing put skew, signals reduced demand for immediate downside protection. This means short-term fear has cooled, though Bitcoin still remains vulnerable to sudden shifts.
Bitcoin Options Volatility. Source: Glassnode
BTC Price Still Needs To Test Crucial Support
Bitcoin is trading at $91,366, holding firmly above the $89,800 support level after crossing $90,000 for the first time in seven days. The crypto king now faces resistance at $91,521, a key barrier that will determine the next leg of its recovery.
Volatility may increase if long-term holders begin realizing losses, potentially derailing the rebound. This scenario could pull Bitcoin back below $90,000, exposing it to declines toward $86,822 or $85,204 in the short term.
Bitcoin Price Analysis. Source: TradingView
If long-term holders continue realizing profits and traders maintain a bullish tone, Bitcoin should remain protected from deeper downside.
This resilience could help reignite bullish momentum, allowing BTC to break above $91,521 and target $95,000. A move beyond this psychological zone would open the path toward $98,000 and potentially a push toward the $100,000 mark.
