Bitcoin (BTC) breaking the $96,000 level on Wednesday has been supported more by market structure than by sustained demand, according to a report from Glassnode, which warns that volatility risk is being postponed rather than resolved.
Bitcoin on Wednesday evening was trading at $97,500, up 3.5% at the time of writing.
After posting two consecutive higher highs, Bitcoin’s advance carried price directly into a historically significant overhead supply zone between roughly $93,000 and $110,000.
This range is dominated by long-term holder supply accumulated during April to July 2025, a period marked by sustained distribution near cycle highs.
Overhead Supply Remains The Key Test
Glassnode notes that rallies since November have repeatedly stalled at the lower boundary of this supply cluster, as long-term holders sold into strength.
While long-term holders remain net sellers, the intensity of distribution has slowed materially.
Net realized profit among long-term holders has declined to around 12,800 BTC per week, down sharply from peaks above 100,000 BTC per week during prior distribution phases.
The moderation suggests sell-side pressure is easing, but Glassnode cautions that absorption of this overhead supply remains a prerequisite for any durable trend reversal.
Spot Flows Improve, But Conviction Remains Uneven
Spot market behavior has turned more constructive following the late-2025 drawdown.
Aggregate exchange flows and Binance-led cumulative volume delta have shifted into buy-dominant regimes, indicating that market participants are increasingly absorbing supply rather than distributing into rallies.
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At the same time, selling pressure from Coinbase, a consistent source of distribution during the consolidation phase, has eased materially.
Despite these improvements, Glassnode emphasizes that spot accumulation has yet to become persistent, a condition typically observed during sustained bull phases.
Derivatives Positioning Drives Recent Upside
The report attributes much of the recent push into the $97,000 region to derivatives-driven mechanics rather than organic demand.
Short liquidations occurred on relatively thin futures volume, allowing modest positioning shifts to generate outsized price moves.
Futures turnover remains well below the elevated levels seen earlier in 2025, leaving the market sensitive to changes in liquidity and positioning.
Without sustained spot participation, Glassnode warns that rallies driven by forced covering risk fading once mechanical buying pressure subsides.
Volatility Is Deferred, Not Eliminated
Options markets reinforce the picture of unresolved risk.
Implied volatility remains low across maturities, but downside skew continues to favor puts, reflecting persistent demand for longer-dated protection.
Dealers remain positioned short gamma around current spot levels, a structure that can amplify price moves once momentum develops.
Glassnode describes this setup as a fragile equilibrium, where calm price action reflects positioning rather than confidence.
The report further states that while structural conditions are improving, Bitcoin remains vulnerable to abrupt repricing until overhead supply is absorbed and sustained spot accumulation re-emerges.
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