The post BTC Failed Breakout at $98K Signals Persistent Supply Overhang appeared on BitcoinEthereumNews.com. Caroline Bishop Jan 21, 2026 20:17 Glassnode analysisThe post BTC Failed Breakout at $98K Signals Persistent Supply Overhang appeared on BitcoinEthereumNews.com. Caroline Bishop Jan 21, 2026 20:17 Glassnode analysis

BTC Failed Breakout at $98K Signals Persistent Supply Overhang

4 min read


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

Disclaimer: The articles reposted on this site are sourced from public platforms and are provided for informational purposes only. They do not necessarily reflect the views of MEXC. All rights remain with the original authors. If you believe any content infringes on third-party rights, please contact service@support.mexc.com for removal. MEXC makes no guarantees regarding the accuracy, completeness, or timeliness of the content and is not responsible for any actions taken based on the information provided. The content does not constitute financial, legal, or other professional advice, nor should it be considered a recommendation or endorsement by MEXC.

You May Also Like

Cashing In On University Patents Means Giving Up On Our Innovation Future

Cashing In On University Patents Means Giving Up On Our Innovation Future

The post Cashing In On University Patents Means Giving Up On Our Innovation Future appeared on BitcoinEthereumNews.com. “It’s a raid on American innovation that would deliver pennies to the Treasury while kneecapping the very engine of our economic and medical progress,” writes Pipes. Getty Images Washington is addicted to taxing success. Now, Commerce Secretary Howard Lutnick is floating a plan to skim half the patent earnings from inventions developed at universities with federal funding. It’s being sold as a way to shore up programs like Social Security. In reality, it’s a raid on American innovation that would deliver pennies to the Treasury while kneecapping the very engine of our economic and medical progress. Yes, taxpayer dollars support early-stage research. But the real payoff comes later—in the jobs created, cures discovered, and industries launched when universities and private industry turn those discoveries into real products. By comparison, the sums at stake in patent licensing are trivial. Universities collectively earn only about $3.6 billion annually in patent income—less than the federal government spends on Social Security in a single day. Even confiscating half would barely register against a $6 trillion federal budget. And yet the damage from such a policy would be anything but trivial. The true return on taxpayer investment isn’t in licensing checks sent to Washington, but in the downstream economic activity that federally supported research unleashes. Thanks to the bipartisan Bayh-Dole Act of 1980, universities and private industry have powerful incentives to translate early-stage discoveries into real-world products. Before Bayh-Dole, the government hoarded patents from federally funded research, and fewer than 5% were ever licensed. Once universities could own and license their own inventions, innovation exploded. The result has been one of the best returns on investment in government history. Since 1996, university research has added nearly $2 trillion to U.S. industrial output, supported 6.5 million jobs, and launched more than 19,000 startups. Those companies pay…
Share
BitcoinEthereumNews2025/09/18 03:26
XRP Ledger Unlocks Permissioned Domains With 91% Validator Backing

XRP Ledger Unlocks Permissioned Domains With 91% Validator Backing

XRP Ledger activated XLS-80 after 91% validator approval, enabling permissioned domains for credential-gated use on the public XRPL. The XRP Ledger has activated
Share
LiveBitcoinNews2026/02/06 13:00
TrendX Taps Trusta AI to Develop Safer and Smarter Web3 Network

TrendX Taps Trusta AI to Develop Safer and Smarter Web3 Network

The purpose of collaboration is to advance the Web3 landscape by combining the decentralized infrastructure of TrendX with AI-led capabilities of Trusta AI.
Share
Blockchainreporter2025/09/18 01:07