Bitfinex Report: Bitcoin Selling Pressure Remains Excessive, But Market Structure Has Begun to Improve

According to the Bitfinex Alpha report, driven by robust spot demand, Bitcoin once broke through the resistance level between $94,000 and $95,000, reaching an intraday high of $97,850 on January 14, marking the highest level in over two months. This rally triggered a significant short squeeze, with single-day short liquidations hitting a nearly 100-day high. Open interest subsequently normalized, leveraged long positions took profits, and short positions were forced to exit. Since Bitcoin returned to its 2025 opening price and rose over 21% from recent lows, the market structure has significantly improved, even as the price has retreated approximately 6% from the peak. This breakout, even if temporary, remains constructive, reflecting reduced leverage pressure and improved market conditions, provided spot demand persists.

Bitcoin is entering a dense supply zone dominated by Long-Term Holders (LTHs), roughly between $93,000 and $110,000, where previous rally attempts have been thwarted. Although Long-Term Holders remain net sellers, their selling pace has slowed significantly, with realized profits dropping from a cycle peak of over 100,000 Bitcoin to approximately 12,800 Bitcoin per week. This deceleration, coupled with support from first-quarter seasonal factors and stronger order flow dynamics compared to previous rebounds, increases the likelihood of Bitcoin absorbing the overhead supply. For a sustained breakout above this zone, further easing of selling pressure from Long-Term Holders is needed, paving the way for a more enduring rally and a potential retest of historical highs.