- Bitcoin faces increasing pressure due to excess supply and weak demand, impacting market structure.

According to a report released on Wednesday by Glassnode analysts, Bitcoin continues to trade within a narrow range between $60,000 and $70,000, lacking a clear catalyst for a decisive breakout.

The core of Bitcoin's current trend lies in the measure of total supply in loss, which tracks the amount of Bitcoin last traded at prices higher than the current market level.

Using the 30-day simple moving average, the Glassnode platform indicates that approximately 8.4 million Bitcoin are currently held at a loss. This level resembles the conditions seen in mid-2022, when a similar surplus required widespread redistribution before the market stabilized.

Total Bitcoin supply in loss (30-day simple moving average). Source: Glassnode

"Historically, resolving such a surplus requires effective redistribution of coins from holders incurring losses to new buyers at lower prices. The 2022 bear market precedent is useful in this regard," Glassnode stated.

- Long-term holder supply continues to pressure Bitcoin price
The report also notes that the 30-day simple moving average of realized losses among long-term holders has steadily increased since November, reaching around $200 million daily.

While this wave of realized losses is necessary for market reset, Glassnode pointed out that more sustainable recovery will require reducing selling pressure to below $25 million per day.

Glassnode also indicated that spot trading volume data on Coinbase has turned slightly positive over a 30-day basis. This shift suggests buyers are beginning to absorb supply after a prolonged period of selling earlier in the year.

However, modest data indicates demand remains cautious rather than driven by conviction.

Spot trading volume difference for Bitcoin (Coinbase). Source: Glassnode

Corporate interest in buying Bitcoin is also waning, as Marathon Digital reduced its Bitcoin holdings after selling nearly 15,000 BTC. Meanwhile, Grayscale remains one of the few companies maintaining large-scale accumulation, although the Treasury Department did not add to its holdings last week.

This decline reflects that corporate treasury bets are becoming more focused, potentially weakening their impact on Bitcoin price stability.

The report states that "corporate supply remains, but is less extensive and thus provides less structural support compared to earlier stages of the cycle."

In derivatives markets, indicators suggest a decline in bullish sentiment and an increase in defensive posture.

The trend indicator index has fallen to neutral levels, indicating no strong directional bias.

Despite the apparent calm, risk indicators continue to rise. The delta 25 divergence index, a measure of market sentiment, especially in long-dated options, has increased, signaling traders are increasingly hedging against potential downturns.

Glassnode wrote: "The market is not pricing in large moves aggressively but is consistently placing greater weight on downside risks across the yield curve, indicating a sustained defensive bias rather than a temporary reaction."

Additionally, traders' gamma exposure has shifted to negative territory below the current price range, extending from around $68,000 to $50,000. In such conditions, market makers tend to sell when prices decline, amplifying downward movements if selling pressure accelerates.
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