Authored by: Glassnode
Compiled by: AididiaoJP, Foresight News
Bitcoin remains confined within the $60,000 to $70,000 range. The spot market shows early signs of absorption, while the derivatives market has completed a reset. Volatility has cooled, and positioning has become more balanced. However, the lack of a clear catalyst means the market lacks the confidence needed for a sustained breakout.
Summary
- Bitcoin remains stuck in a wide range between $60,000 and $70,000. URPD data shows a dense cluster of supply overhead between $80,000 and $126,000. Digesting this supply overhang may require a deeper price discount or a longer period of redistribution.
- The total supply in loss is approaching 8.4 million BTC, resembling the market structure seen in Q2 2022. Back then, the market needed to redistribute approximately 3 million BTC to regain the cycle midline.
- Long-Term Holder Realized Loss has been climbing since November 2025, now reaching levels around $200 million per day, confirming active capitulation. A cooling of this metric below $25 million per day would be a key threshold for market bottom formation.
- The Coinbase Spot Cumulative Volume Delta has turned to a slight positive, indicating spot buyers are beginning to absorb selling pressure. However, the current level of demand remains far below what is typically seen during the formation of durable lows.
- Treasury flows have become more concentrated: Marathon has distributed ~15,000 BTC, while Strategy remains the only institution conducting large-scale, consistent buying.
- Directional premium in the perpetual swap market has compressed to near-neutral levels, slightly below zero, reflecting a reset of long-biased leverage and cooling speculative enthusiasm.
- Current perpetual positioning is far from momentum-driven; long exposure is being unwound, and short interest is re-emerging. This leaves the futures market more balanced overall, but also more cautious.
- Implied Volatility continues to soften across the term structure, indicating the options market is pricing in a calmer near-term environment and reduced demand for volatility exposure.
- Skew metrics are beginning to tilt downward again, signaling a return of protective positioning, though their levels remain well below those typically associated with strong hedging demand.
- Gamma positioning has flipped back to being supportive of the market, reducing convexity effect on the downside and indicating stabilizing short-term dealer positioning following the recent negative gamma regime.
On-Chain Insights
The Scale of Unrealized Loss Supply
As price consolidates in the $60k-$70k range, this report will look beyond short-term price action to assess the structural forces shaping the current market. As noted in recent reports, one of the most persistent headwinds to momentum is the significant volume of supply acquired above $80k, which is now held at an unrealized loss.
This cohort has endured a bearish environment for over six months, facing a binary behavioral choice: either sell into any rally to minimize further losses, or capitulate psychologically as drawdowns deepen.
The URPD chart illustrates this clearly, showing a dense cluster of supply firmly overhead between $80k and $126k. Resolving this supply overhang will likely require either a significant price discount to attract new buyers, or a prolonged period where these coins are redistributed from loss-realizing holders to more conviction-driven new owners.
Supply in Loss
To quantify the overhead supply, we can use the 'Total Supply in Loss' metric. It counts the number of circulating bitcoins whose last move price was above the current spot price. Smoothed with a 30-day SMA to remove short-term noise, this metric currently sits around 8.4M BTC, meaning roughly 8M to 9M coins have been in loss persistently over the past month.
The scale of this value, coupled with spot trading near the current cycle's midline, suggests parallels to the market structure observed in Q2 2022. Historically, resolving supply overhangs of this magnitude has required a significant redistribution of coins from loss-holding sellers to new buyers entering at lower prices. The precedent of the 2022 bear market is instructive. Typically, the Total Supply in Loss compressed from above 8M BTC to around 5M BTC before the market decisively reclaimed the cycle midline. This implies roughly 3M coins changed hands before conditions normalized.
Tracking the Redistribution in Progress
After establishing the scale of loss supply needing redistribution, the next step is monitoring the pace of this process. The 'Long-Term Holder Realized Loss' metric measures the total value of losses realized by investors holding coins for over six months who are now selling below their cost basis. This metric directly captures the active redistribution of the aforementioned overhead supply.
Its 30-day moving average has been steadily rising since November 2025 and is now elevated at ~$200M per day. This confirms that Long-Term Holders are increasingly capitulating to the current market. While this wave of loss realization is a necessary and constructive part of the bear market clearing process, it alone is not a sufficient condition for a reversal. A significant cooling of this metric below $25M per day would represent a more convincing signal of seller exhaustion and has been a prerequisite for market basing historically, before sustainable bull markets commence.
Off-Chain Insights
Coinbase Spot Demand Returns
The spot market is showing tentative signs of stabilization. The 30-day moving average of the Coinbase Spot Volume Delta has turned to a slight positive in the latest readings. This follows an extended period of negative values throughout January and early February, reflecting sustained distribution pressure.
The recent shift suggests that as price stabilizes, buyers are beginning to absorb available supply and provide support. However, the magnitude of the positive delta remains modest, indicating current demand is tentative rather than conviction-driven.
Historically, more robust market recoveries require sustained positive spot flows, whereas fleeting bouts of buying often fail to produce follow-through. For now, the recent uptick is constructive, but a more durable recovery would likely require an expansion in buying pressure.
Treasury Flows Grow More Complex
The broad base of treasury flows has weakened significantly in recent months. The latest data reveals a more uneven and selective pattern of activity. Earlier in the cycle, corporate accumulation was supported by a wider array of allocators. Recent flows, however, suggest buying support is becoming increasingly concentrated.
Most notably, Marathon has sold approximately 15,000 BTC, standing as one of the clearest examples of recent corporate treasuries reducing, not increasing, exposure. In contrast, Strategy appears to remain the only consistent structural buyer; the firm continues to make regular purchases even as participation from others becomes more sporadic.
This shift points to a significant change in market structure. Corporate demand is no longer a broad-based corporate accumulation trend and now appears narrower and more reliant on a single dominant player. The net result is that corporate buying, while still present, is on a less broad foundation and therefore a less reliable source of structural support compared to earlier cycle phases.
Perp Premium Reset
Directional premium in the perpetual swap market continues to compress, with the 30-day sum now near neutral and slightly negative. This marks a clear cooling from the long-biased conditions that previously supported the rally.
This shift suggests bullish speculative positions are being unwound, and short interest is beginning to re-emerge. The current structure does not reflect strong market conviction but points towards a more cautious and balanced perpetual market landscape.
Historically, resets in directional premium often accompany consolidation or trend exhaustion. This is because leverage is repriced following an extended move. In this sense, the recent decline in premium indicates speculative appetite has waned, leaving the perp market thoroughly reset with reduced leverage.
Volatility Expectations Are Lowering
Following the reset in options market positioning, Implied Volatility is among the first places showing changes. Bitcoin's volatility term structure has shifted lower overall compared to last week, led by the front end. 1-week ATM Implied Volatility is now 51%, with the 3-month at 49%. Other tenors are packed tightly in between, with the 6-month at 49.8%, pointing to a significantly compressed term structure.
This reflects a market dialing down expectations for near-term large moves, despite ongoing macro uncertainty. Longer-dated vol is relatively better supported, suggesting uncertainty hasn't disappeared but is being pushed further out in time. In the near term, pricing is shifting towards a more convergent volatility regime as the market lacks immediate catalysts and demand for optionality has faded.
Downside Protection Begins Rebuilding
As volatility expectations soften, skew metrics reveal a shift in positioning towards more caution. The 25delta skew (calculated as put IV minus call IV) is higher, indicating the market prices more for downside protection. Last week, 1-week skew hit a monthly high of 22.7% before pulling back, reflecting its sensitivity to immediate price action. In contrast, longer-dated skew continues to trend higher and hold elevated: 1-month at 17.4%, 6-month at 13.2%.
This divergence across tenors is telling. While near-term price stabilization has slightly eased short-dated hedging demand, there remains strong buying of protective options in the medium term. The market isn't pricing aggressive moves, but the entire term structure consistently assigns more weight to downside risks. This points to a sustained defensive bias, not merely a transient reaction to short-term market gyrations.
Short-Term Gamma Below Market
This more defensive positioning becomes more relevant when mapped to dealer gamma exposure. Negative gamma is now stacking up below current price levels, stretching from $68k down into the $50k's. This implies the market is buying puts below the spot price and does not expect the recent bounce to last much longer, forcing dealers to be the counterparty to these trades.
In this setup, dealers will be forced to sell into weakness, amplifying downward moves. With overall market structure appearing fragile post the March 27th expiry thinning liquidity, a move into this zone could exacerbate downside momentum through hedging flows. This could trigger accelerated selling, turning what might be a gradual move into a more violent repricing, potentially retesting the $60k level – the low of the February 5th sell-off.
Calm Realized Volatility Masks Fragility
Compounding the fragility of the current setup is that Implied Volatility remains elevated above Realized Volatility. On the front end, 1-week Realized Vol is 38%, while 1-week Implied is 49%, a gap of 11 percentage points. This gap has persisted for over three weeks, indicating options are consistently priced for more movement than the market is actually experiencing.
At first glance, this reflects a seemingly stable market, as realized vol remains contained. However, the persistent premium suggests market participants are pricing risk despite a lack of actual price follow-through, pointing to an environment of low market confidence.
Combined with negative gamma, a market where vol is priced above realized is susceptible to having moves amplified by relatively modest selling pressure. This is because the market adjusts rapidly from a compressed pricing base, with limited positioning capacity to absorb flows.
Conclusion
Bitcoin remains locked in a wide $60k-$70k range. The market shows tentative signs of stabilization but lacks sufficient momentum for a decisive breakout in either direction. On-chain conditions still reflect a market in repair: supply in loss is elevated, and Long-Term Holder capitulation has not yet fully cooled. Meanwhile, spot demand is beginning to show improvement, suggesting sellers no longer have complete control.
Off-chain, the picture is similarly balanced. Corporate treasury demand has narrowed significantly, perpetual leverage has reset, implied volatility has softened, and dealer positioning stability has improved. Together, these signals point to an environment no longer under obvious stress but still searching for stronger conviction.
For now, Bitcoin appears to be in a phase of redistribution rather than trending clearly. Until spot demand expands more significantly and the overhead supply overhang begins to clear, range-bound trading is likely to remain the dominant characteristic.
