Bitcoin Bounces Back to Resistance: Short-Term Holder Cost Basis at $69K Becomes Key Decision Point

Original Author: Glassnode

Original Translation: AididiaoJP, Foresight News

Summary

• Escalation of tensions in Iran led to a surge in oil prices, while stock markets were flat or declined; Bitcoin absorbed the shock, outperforming both major stock indices for the second consecutive week.
• For the first time in five months, core inflation data came in lower, arriving exactly one week before the FOMC meeting, with policy rates still remaining above inflation, maintaining a restrictive stance.
• The 10-year US Treasury yield returned to high levels, while the US dollar remained relatively stable; the 'ceiling' formed jointly by yields and the dollar has not yet been lifted.
• Price has entered a decision zone: above is the short-term holder cost basis around $69,000, below is the market's heaviest demand support cluster.
• Supply near the current price is tilting towards the support side, exchange net inflows continue to weaken, and the profit-taking pressure needed to halt the rally has not yet accumulated.
• Accumulation behavior has narrowed to a high-conviction group holding 1,000-10,000 BTC, with breadth remaining the missing piece on-chain.
• On the off-chain front, signals tracked in this report have finally materialized: ETF flows have turned positive, price has risen above max pain, and hedging positions have fallen to multi-month lows.
• Altcoins are weakening against Bitcoin again, with capital concentrating on the leader; the market compass reading also indicates: repairing, but still in a low risk appetite zone.

Macro Insights

Weathering the Oil Price Shock

The macro test this week came from the oil market. WTI crude surged due to the escalation of tensions in Iran, an external shock that typically drags down all risk assets. However, the stock market reacted mildly: the S&P 500 closed the week lower, and European markets were flat. Bitcoin continued its upward trajectory under the same shock, outperforming both major stock indices for a second week. A market that can still rise on bad news suggests that marginal selling pressure has largely been exhausted – this resilience itself is a signal.

Inflation Finally Bends

Core inflation recorded a decline for the first time in five months, reaching a level closest to its target since the highs of 2022. While a single data point does not make a trend, the timing is impeccable: with next week’s FOMC meeting approaching, the federal funds rate remains over 100 basis points above core inflation.

This gap is a manifestation of restrictive policy and gives the Fed room to maneuver. Signaling a rate cut would remove one of the macro brakes tracked in this report throughout the year; staying silent would force the market to continue relying on crypto-native momentum.

Yields Rise, Dollar Steadies

The bond market did not cooperate. The 10-year US Treasury yield returned near recent highs, continuing to pressure all risk assets; the US dollar, however, was relatively mild, far below its winter highs.

The ceiling for this cycle is clear: a 10-year yield above 4.45% and a Dollar Index above 99. The dollar side is close to a breakout, but the yield side is not. A simultaneous breakdown on both fronts remains the key valve for macro release.

On-Chain Insights

Arriving at the Decision Zone

After recovering from the late June lows, the supply distribution around the current price becomes the core narrative. Above is the short-term holder cost basis around $69,000 – the breakeven line for buyers over the past five months. Below is the heaviest demand support cluster on the chart, accounting for about one-tenth of total supply, concentrated near $63,000 (the median price of the last coin transfer). The realized price floor further down is much lower.

The asymmetry of this first wall is well known: when approaching from below in a downtrend, the breakeven point of recent buyers often becomes a selling pressure zone, as holders most eager to sell are about to break even. Once broken above, it opens an 'air pocket' up to the $84,000 level. Successful recapture leads to thin resistance in this zone, allowing for rapid revaluation; failure would subject the support cluster below to a new round of testing.

Support Converging on the Test Zone

Supply near the price is taking sides. Distance-weighted cost basis data shows that near-price chips are divided into support below and resistance above, and the share of support has just edged past the resistance side, with the resistance-dominated pattern seen since spring on the verge of flipping.

Halting a rally requires selling pressure, and the fuel tank isn't full yet. The classic trigger signal is the profitable supply ratio of short-term holders breaking above 54% – enough recent buyers breaking even to generate sizable selling. Currently, this indicator is far from that level, and the short-term holder SOPR remains stable near the breakeven line without flipping negative. Recent buyers are neither euphoric nor exiting.

Selling Pressure Gradually Subsides

The exchange 'revolving door' has slowed down. During the market breakdown in early June, exchange net position changes showed significant net inflows – potential selling pressure reaching the trading venues. This wave of inflows has been weakening for several weeks and is now just a fraction of its peak.

The weakening of inflows without dominant outflows creates a neutral pattern: demand is absorbing the incoming volume, but the structural withdrawal trend characteristic of a healthy market has not returned. A confirmation signal to watch for is sustained net outflows – exactly the kind of on-chain follow-through that the ETF channel is just starting to provide.

Conviction Consolidates, Breadth Lacks

The June rally was driven by broad accumulation: accumulation trend scores covered all wallet cohorts at the lows. The past two weeks have been different, with buying narrowing to the 1,000-10,000 BTC range – historically, these wallets often lead lasting turning points – while the middle cohort has switched back to distribution.

Concentrated accumulation has pros and cons. The steadfast conviction of large, patient wallets has led recoveries many times before. However, a market structure supported by a single group is thinner than when all cohorts participate. The return of breadth during the next upswing will be the key differentiator between a squeeze and a trend.

Off-Chain Insights

Redemption Streak Ends

For weeks, every improvement came with the same condition: derivatives were optimistic, but ETF channels continued to bleed. US spot Bitcoin ETF flows have turned net positive, marking the first sustained net buying since the end of the June redemption wave.

Last week’s report noted that institutions had stopped fleeing but hadn't started buying. The current flip is still early and modest in scale, but it transforms a purely derivatives-driven rally into one supported by spot buying. Persistence, rather than scale, is the key metric to watch.

Above Max Pain

The max pain level – the price at which the most option positions expire worthless – has acted as overhead resistance all spring. Bitcoin approached from below last week and has now risen above this aggregate level, far higher than its position at the February lows.

Historically, recapturing max pain often coincides with a shift towards a friendlier options market, though the transition is usually gradual. Maintaining a position above it during the upcoming options expiry cycle would cause dealer hedging flows to dampen rather than amplify volatility, turning 'pain' from a ceiling into an anchor.

Hedging Unwinds, Shorts Squeezed

Since the June lows, every edition of this report has tracked the same quiet process: traders closing short positions and letting downside protection expire. Now, the market has loudly confirmed it. The weekly 25-Delta skew collapsed to multi-month lows, with front-end curve downside protection abandoned the fastest, and the one-month tenor following suit.

The put/call composite metric confirms this trend: the put/call ratio for options open interest fell to its lowest point this year, the volume ratio halved from the June hedging peak, and perpetual contract funding rates have stayed below the neutral line daily over the past month.

This optimism stems from the unwinding of hedges, not the piling on of new leverage. Squeezes built on this foundation typically see more moderate retracements than those driven by high funding rates.

Altcoins Bleed, Bitcoin Leads

Beneath the surface, capital continues to favor the leader. Altcoins across various tiers have been weakening against BTC for years. This spring, the long-term downtrend flattened, forming the most constructive altcoin bottom in the bear market. Last week, this slow decline quietly restarted: as Bitcoin rose, smaller-cap coins conceded further ground against BTC.

This is the healthy version of rotation. Bitcoin leading first concentrates capital in the most liquid asset, then spills outward; premature altcoin leadership is often a bubble. A defended bottom and Bitcoin leading the charge is the correct sequence for a lasting recovery.

Conclusion

Until proven otherwise, this remains a bear market rally, and the proving ground is clear. The squeeze has done everything a squeeze can do: hedges unwound, shorts covered, funding rates calm, and ETFs flipped from a headwind to a tailwind. Yet it has not cleared the overhead resistance. This week, Bitcoin remains below the $69,000 short-term holder cost basis, with an air pocket above leading to the $84,000 level; below lies the $63,000 demand support cluster and an emerging support structure.

A decisive recapture of 69K with sustained spot inflows would open the pocket above. A rejection accompanied by a resurgence of exchange inflows would see the market fall back to test the support zone.