Bitcoin Rally Faces $81K-$86K Supply Wall, Glassnode Warns

Bitcoin Market Analysis & News

On-chain analytics firm Glassnode has identified a price band between $81,000 and $86,000 as the main obstacle to Bitcoin’s continued recovery, citing a cluster of sell pressure from long-term holders, self-custody wallets, and options market mechanics stacking in the same range.

The rally began after the US Treasury announced a buyback expansion last week. A subsequent short-liquidation event on Aug. 19 then accelerated the move, with Glassnode identifying it as the largest short squeeze since 2019. The firm said the squeeze cleared 86% of the modeled liquidation clusters sitting in Bitcoin’s (BTC) price corridor.

Derivatives Market Deleveraged, Not Rebuilt

Futures open interest fell 11% in coin terms following the squeeze. Perpetual funding rates held near neutral throughout the event, which Glassnode read as a sign that fresh long positions did not step in to replace the liquidated shorts. The market shed leverage without rebuilding it.

US spot Bitcoin exchange-traded fund flows moved in the opposite direction over the same period. Net inflows exceeded $2.8 billion across eight consecutive days, and on-chain data showed coins leaving exchanges as wallets of multiple size categories accumulated Bitcoin.

Related Article: Bitcoin ETFs Record 7-Day Inflow Streak, Top $3B in August

Glassnode identified $81,000 to $86,000 as the range where multiple resistance factors converge. A large group of long-term holders reaches breakeven inside that band, making it the point where selling to exit flat becomes an option for those investors.

Self-custody wallets present a separate concentration near $80,800, where Glassnode sees the first dense pocket of Bitcoin that has not moved off cold storage. Options dealers shift their hedging direction around $82,300, and above that level their positioning tends to work against further price gains. A shelf of residual short liquidation levels between $82,000 and $86,000 layers onto the same zone.

Glassnode’s report described these factors as parts of the same picture rather than separate risks. Long-term holder breakeven costs, self-custody concentrations, options market mechanics, and leftover squeeze levels all converge in the $81,000 to $86,000 band, the firm said. Sustained settlement above $83,300 alongside continued ETF inflows would indicate demand is absorbing that supply. A drop back to $62,900 would undo the rally entirely.

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Source: coinmarketcap.com