Caroline Bishop
Jan 21, 2026 20:17
Glassnode analysis reveals Bitcoin’s rejection at $98K STH cost basis mirrors Q1 2022 structure. On-chain data shows dense supply above $100K constraining upside.
Bitcoin’s relief rally has hit a wall. After weeks of seller exhaustion pointed to a potential rebound, BTC stalled just beneath the $98,400 Short-Term Holder cost basis—a rejection that Glassnode analysts say mirrors the prolonged consolidation pattern of Q1 2022.
As of January 21, Bitcoin trades at $89,689, down 2% over 24 hours as a broader global selloff deepens. The price now sits uncomfortably between the True Market Mean at $81,100 and that stubborn $98K ceiling where breakeven sellers keep dumping into strength.
The Supply Wall Nobody Can Climb
Here’s the core problem: there’s a massive concentration of coins acquired above $100K that hasn’t been resolved. Glassnode’s URPD analysis shows this supply zone is “wide and dense,” gradually maturing into long-term holder territory. These aren’t panic sellers—they’re patient investors who accumulated between Q1 and Q3 2025 and are now waiting for their exit.
The recent push toward $98K did fill some of the air gap between $93K and $98K through redistribution. Top buyers handed off to newer participants, creating fresh short-term holder supply clusters. But that dense overhead zone above $100K? Still intact. Still waiting.
“Until new demand emerges with sufficient strength to absorb this overhead supply, long-term holders remain a latent source of resistance,” the Glassnode report states.
Who’s Actually Selling
The Realized Loss by Age metric tells the story. Loss realization is dominated by the 3-6 month cohort, with secondary contribution from 6-12 month holders. Translation: investors who bought above $110K are cutting losses as price revisits their entry range. Classic pain-driven behavior.
On the profit side, there’s been a notable increase in the 0% to 20% margin cohort—breakeven sellers and swing traders grabbing thin gains rather than holding for trend continuation. When participants prioritize capital preservation over conviction, rallies get capped at nearby cost-basis levels.
Derivatives Market Resembles a Ghost Town
BTC futures volume continues contracting on a 7-day moving average basis. Recent price moves have occurred without meaningful volume expansion—thin liquidity driving action rather than aggressive positioning.
Options markets show tactical rather than structural concern. One-week implied volatility jumped 13 points since Sunday’s selloff, but three-month IV moved just 2 points. Six-month barely budged. Traders are pricing short-lived risk, not lasting disruption.
The one-week 25-delta skew shifted 16 volatility points toward puts, reaching nearly 17% put richness. But following Trump’s Davos discourse, that downside richness has already started reverting—almost as quickly as it spiked.
Dealer Gamma Creates Asymmetric Setup
Below $90K, dealers are short gamma—meaning downside moves can accelerate as hedges get adjusted through selling. Above $90K, dealer long gamma introduces stabilizing forces that dampen rallies.
This creates fragility below current levels while the $90K mark acts as friction. Reclaiming it sustainably requires momentum sufficient to absorb dealer hedging flows.
What Would Break This Pattern
Spot flows have turned more constructive. Binance and aggregate exchange CVD measures have rotated toward buy-dominant, and Coinbase—a consistent source of sell-side aggression—has seen meaningful slowdown in net selling.
Corporate treasury activity remains sporadic. Strategy Inc made a record Bitcoin purchase earlier this week, but aggregate corporate demand hasn’t transitioned into sustained accumulation. Most treasuries are inactive or opportunistic.
The volatility risk premium stands at 11.5 points as of January 20, favoring sellers. This keeps implied volatility anchored and reinforces compression—until it doesn’t.
A clean breakout above $98.4K and $100K would require “meaningful and sustained acceleration in demand momentum.” For now, Bitcoin appears to be building a base through a pause in conviction rather than excess participation. The next catalyst remains elusive.
Image source: Shutterstock
Source: https://blockchain.news/news/btc-failed-breakout-98k-supply-overhang-glassnode
