Bullish momentum wanes, volatility weakens, Bitcoin remains locked in the $60,000 to $70,000 range

$80,000 to $126,000 supply pressure is the biggest obstacle to any upward move.

By: Glassnode

Compiled by: AididiaoJP, Foresight News

Bitcoin is still trading in the $60,000 to $70,000 range. The spot market is showing early signs of absorption, and the derivatives market has completed its reset. Volatility has cooled somewhat, and the positioning structure is moving toward balance. However, due to a lack of clear catalysts, the market lacks the confidence needed to achieve a sustained breakout.

Summary

• Bitcoin is still stuck in a wide range of $60,000 to $70,000. URPD data shows that there is a dense supply overhang in the $80,000 to $126,000 range. To digest this supply overhang, it may require a larger price discount to attract new buyers, or a longer redistribution process.
• The total supply in a loss position is close to 8.4 million BTC, which is similar to the market structure seen in Q2 2022. At the time, the market needed to redistribute roughly 3 million BTC in order to return to the cycle midpoint.
• Realized losses for long-term holders have been steadily rising since November 2025, and are now at around $200 million per day, confirming that active capitulation has begun. If this metric cools down to below $25 million per day, it would be the key threshold for the market to form a bottom.
• Coinbase’s spot cumulative成交量 differential has turned to a slightly positive value, indicating that spot buyers are starting to absorb sell-side pressure. However, the current demand level is still far below what is typically seen when the market forms enduring lows.
• Treasury flows are becoming more concentrated: Marathon has distributed roughly 15,000 BTC, while Strategy remains the only institution carrying out ongoing large-scale buying.
• Directional premium in the perpetual futures market has compressed to around neutral levels and is slightly below zero, reflecting the resetting of long leverage and a cooling of speculative enthusiasm.
• The current perpetual futures positioning is no longer driven by momentum. Long exposure is being closed, and short open interest is resurfacing. This makes the futures market overall more balanced, but also more cautious.
• Implied volatility has continued to soften across the entire term structure, indicating that the options market is pricing in a calmer near-term environment and a decline in demand for volatility exposure.
• The skew indicator has started to tilt back downward, showing a return of protective positioning, though its level remains far below the levels typically associated with strong hedging demand.
• Gamma positions have turned back into a state that supports the market, reducing the convexity effect when prices fall. This indicates that, after the recent negative-gamma phase, market makers’ short-term positioning has become more stable.

On-chain insights

Unrealized loss supply volume

As prices consolidate in the $60,000 to $70,000 range, this report will step outside short-term price dynamics and assess the structural forces shaping the current market environment. As noted in recent reports, one of the most persistent obstacles suppressing momentum comes from a large amount of supply bought above $80,000, which is currently in an unrealized loss state.

This cohort has endured more than six months of a bear market environment and faces a binary behavioral choice: either sell during any rebound to reduce further losses, or psychologically capitulate as the price retraces further.

The URPD charts make this clear: they show that in the $80,000 to $126,000 range there is a densely distributed supply cluster hanging firmly above the market price. To resolve this supply overhang, it is likely necessary to attract new buyers with a significant price discount, or to allow a longer period for these coins to transfer from holders in unrealized loss to more firmly committed new holders.

Loss supply volume

To quantify the supply overhang overhead, we can use the metric “Total Supply in Loss.” It counts the amount of circulating Bitcoin whose last moved price is higher than the current spot price. After being smoothed with a 30-day simple moving average to remove short-term noise, this metric is currently about 8.4 million BTC, meaning that over the past month, roughly 8 million to 9 million coins have been in a loss position.

The size of this figure, combined with spot prices trading near the cycle midpoint of the current cycle, suggests that market structure is similar to what was observed in Q2 2022. Historically, resolving a supply overhang of this magnitude requires redistributing a large number of coins from loss holders to new buyers entering at lower prices. The precedent from the 2022 bear market is instructive. Typically, after the Total Supply in Loss compresses from above 8 million BTC to around 5 million BTC, the market decisively reclaims the cycle midpoint. This means that before market conditions normalize, about 3 million coins have changed hands.

Tracking ongoing redistribution

After determining the size of loss supply that needs to be redistributed, the next step is monitoring the speed of this process. The metric “Realized Loss for Long-Term Holders” measures the total realized losses by investors who have held for more than six months and are now selling below their initial cost basis. This metric directly captures the active redistribution process of the aforementioned supply overhang.

The 30-day moving average of this metric has been rising steadily since November 2025, and is currently at around $200 million per day. This confirms that long-term holders are capitulating to the current market in increasing numbers. While this wave of loss realization is a necessary and constructive step in the bear-market clearing process, it alone is not sufficient to constitute a full condition for a market reversal. If this metric can cool significantly to below $25 million per day, it would represent a more convincing signal of seller power exhaustion—and the prerequisite, historically, for markets to form a bottom before a sustainable bull market begins.

Off-chain insights

Coinbase spot demand returning

The spot market shows early signs of stabilizing. The 30-day moving average of Coinbase’s spot成交量 differential has turned into a slightly positive value in the latest data. Previously, in January and the early part of February, it spent a long period in negative territory—when sustained sell-side pressure reflected persistent distribution.

The recent shift indicates that as prices stabilize, buyers are beginning to absorb the available supply and provide support. However, the magnitude of the positive differential remains modest, suggesting that current demand is still tentative rather than driven by strong conviction.

Historically, a stronger market recovery requires spot capital flows to remain positive over an extended period, because short-lived buying activity often fails to produce follow-through in price action. At present, the recent rebound is constructive, but a more durable recovery may require buy-side pressure to keep expanding.

Treasury flows growing more complex

In recent months, the broad base underpinning treasury flows has weakened significantly. The latest data shows a more imbalanced and selective pattern of activity. In the early stage of the cycle, corporate coin hoarding was supported by a wider set of allocators. However, recent flow data suggests that buy-side support is becoming increasingly concentrated.

Most notably, Marathon has sold roughly 15,000 BTC, which is one of the clearest examples that corporate treasuries are shrinking exposure rather than increasing it. In contrast, Strategy still appears to be the only persistent structural buyer; even if other companies’ participation becomes more sporadic, it continues to make regular purchases.

This shift points to a major change in market structure. Corporate demand is no longer a broad trend of companies accumulating coins; instead, it appears to be narrower and more reliant on a single dominant participant. The end result is that while corporate buying is still present, its base is no longer as broad. Therefore, compared with the early phase of the cycle, the reliability as a source of structural support has declined.

Perpetual premium resetting

Directional premium in the perpetual futures market continues to compress. The 30-day sum is currently near neutral and slightly below zero. This marks a clear cooling off from the previously bullish conditions that supported the uptrend.

This shift indicates that bullish speculative positions are being closed, while short open interest is beginning to reappear. The current structure does not reflect strong market conviction; instead, it points to a more cautious and balanced perpetual futures market regime.

Historically, resets in directional premium are usually accompanied by consolidation or trend exhaustion. This is because after a longer stretch of price action, leverage is repriced. In this sense, the recent decline in premium suggests that speculative appetite has faded, allowing the perpetual market to complete a thorough reset under conditions of weakening leverage.

Volatility expectations are lowering

After the options market positioning reset is completed, implied volatility is where the first visible change appears. Bitcoin’s volatility term structure has shifted downward overall versus last week, with the front-end tenors leading the decline. 1-week at-the-money implied volatility is currently 51%, and the 3-month tenor is 49%. Implied volatility for other tenors is tightly clustered in between—6-month at 49.8%—pointing to a significantly compressed term structure.

This reflects a market that is dialing down expectations for large volatility in the near term, even though uncertainty remains in the macro backdrop. Volatility for longer tenors receives stronger support, suggesting that uncertainty has not disappeared—it has simply been pushed further out along the time dimension. In the short term, pricing is moving toward a more convergent volatility regime because the market lacks immediate catalysts and demand for options flexibility has waned.

Downside protection rebuilding

As volatility expectations soften, the skew indicator reveals a shift in positioning toward a more cautious direction. The higher the 25delta skew (calculated as put options minus call options), the more the market’s pricing leans toward downside protection. Last week, 1-period skew set a new monthly high of 22.7% before the pullback, reflecting its sensitivity to immediate price action. By contrast, the skew for longer tenors continues to rise and stays elevated: 1-month is 17.4%, and 6-month is 13.2%.

This divergence across tenors tells a clear story. Although the stabilization of recent prices has slightly eased near-term hedging demand, protective options over the medium to long term still have strong buy-side demand. The market is not pricing big volatility aggressively, but the term structure consistently assigns more weight to downside risk. This points to a persistent defensive bias rather than merely a temporary response to near-term market volatility.

Short-term Gamma below market levels

This more defensive positioning structure becomes more relevant when mapped to market makers’ gamma exposure. Negative gamma is currently accumulating below the current price level, extending from around $68,000 down to more than $50,000. This means the market is buying put options below the current price and does not expect a rebound in the near term to last very long, forcing market makers to be the counterparty to these trades.

Under this mechanism, market makers will have to sell as prices weaken, amplifying downside volatility. Because liquidity remains thin after the March 27 contract expiry, the overall market structure looks relatively fragile. Once price enters this region, it could further intensify the downward momentum due to a push from hedging flows, triggering accelerated selling. This would turn what might have been a gradual move into a harsher repricing, and could even lead to a retest of the $60,000 level—the low from the February 5 selloff.

Calm realized volatility is masking fragility

Adding to the instability of the current setup is that implied volatility continues to be higher than realized volatility. In the front-end tenors, 1-week realized volatility is 38%, while 1-week implied volatility is 49%, a difference of 11 percentage points. This gap has persisted for more than three weeks, indicating that option pricing has consistently stayed above the actual market volatility.

At first glance, this reflects a market that appears stable, because realized volatility remains within a manageable range. However, the persistent premium suggests that even without actual follow-through in directional price action, market participants are still pricing in risk—pointing to an environment with low market confidence.

When volatility is priced above realized volatility and gamma is negative, even relatively small sell-side pressure can amplify price moves. That’s because the market can quickly reprice from a compressed pricing foundation, and the positioning that absorbs capital flows is limited.

Conclusion

Bitcoin remains locked in a wide $60,000 to $70,000 range. The market shows early signs of stabilizing, but it still lacks enough momentum to deliver a decisive breakout in either direction. On-chain conditions continue to reflect a market that is in the process of repair: loss-position supply remains elevated, and long-term holder capitulation has not fully cooled off. At the same time, spot demand is starting to show improvement, indicating that sellers no longer fully control the market.

In the off-chain markets, the picture is also balanced. Corporate capital demand has narrowed significantly, perpetual futures leverage has completed its reset, implied volatility has softened, and market makers’ positioning stability has improved. Taken together, these signals point to an environment that is no longer under obvious pressure, but still needs to find stronger market conviction.

At present, Bitcoin seems to be going through a redistribution phase rather than exiting a clear trend. Until spot demand expands more noticeably and the supply overhang overhead begins to clear, range-bound trading is expected to remain the market’s main characteristic.