Bitcoin Rally Faces $81K-$86K Supply Wall, Glassnode Warns

Glassnode says BTC's rally, fueled by a record short squeeze and $2.8B in ETF inflows, faces a critical supply wall between $81K and $86K where long-term holders break even.

Bitcoin Market Analysis & News

On-chain analytics firm Glassnode has identified a price band between $81,000 and $86,000 as the main obstacle to Bitcoin's continued recovery, citing a cluster of sell pressure from long-term holders, self-custody wallets, and options market mechanics stacking in the same range.

The rally began after the US Treasury announced a buyback expansion last week. A subsequent short-liquidation event on Aug. 19 then accelerated the move, with Glassnode identifying it as the largest short squeeze since 2019. The firm said the squeeze cleared 86% of the modeled liquidation clusters sitting in Bitcoin's (BTC) price corridor.

Derivatives Market Deleveraged, Not Rebuilt

Futures open interest fell 11% in coin terms following the squeeze. Perpetual funding rates held near neutral throughout the event, which Glassnode read as a sign that fresh long positions did not step in to replace the liquidated shorts. The market shed leverage without rebuilding it.

US spot Bitcoin exchange-traded fund flows moved in the opposite direction over the same period. Net inflows exceeded $2.8 billion across eight consecutive days, and on-chain data showed coins leaving exchanges as wallets of multiple size categories accumulated Bitcoin.