On-chain analytics firm Glassnode has identified a significant supply overhang for Bitcoin above the $98,000 region, which is likely to cap any rallies attempting to breach that level. The firm's latest weekly report highlights that Bitcoin's recent recovery stalled near the Short-Term Holder (STH) Realized Price of $98,400. This metric tracks the average acquisition cost of traders who purchased BTC within the past 155 days.
Glassnode explained that the recent rejection near this level mirrors market structure observed in Q1 2022, where repeated failures to reclaim recent buyers' cost basis led to prolonged consolidation. The firm's UTXO Realized Price Distribution (URPD) chart shows a notable amount of STH supply with a cost basis between current levels and $98,000, representing tokens redistributed by top buyers during the rally. "This unresolved supply overhang remains a persistent source of sell pressure, likely to cap attempts above the $98.4k STH cost basis and the $100k level," Glassnode noted, adding that a clean breakout would require a sustained acceleration in demand momentum.
Concurrently, new research from CryptoQuant indicates Bitcoin may be entering an early-stage bear market. The firm's Jan. 22 report reveals that Bitcoin's net realized profit/loss metric has dropped to 69,000 BTC over the last 30 days, marking the first time holders have realized net losses since October 2023. Annual net realized profits have sharply declined from 4.4 million BTC in October to 2.5 million BTC, levels last seen in March 2022.
"Realized profits peaks have been declining since March 2024, an indication that prices are losing momentum as the bull market ends," CryptoQuant analysts stated, reinforcing that on-chain profit dynamics are now consistent with early bear market conditions. This pattern closely mirrors the 2021–2022 bull-to-bear transition.
Following its rejection from the STH Realized Price, Bitcoin has been on a downward trajectory, now trading around $89,100. The latest sell-off represents a 9% drawdown from its 2026 high of $97,930. Glassnode further noted that Bitcoin now trades below the cost basis of 75% of supply, signaling rising distribution pressure. Key support levels are now being watched, with a major buyer congestion zone between $80,000 and $84,000, where investors acquired about 941,651 BTC over the last six months. The next major support sits around $80,000.
Several analysts, including Titan of Crypto, have highlighted bearish technical signals, with a MACD bearish cross on the two-month timeframe historically followed by 50-64% drawdowns. Market observers warn that a weak derivatives market, selling by long-term holders, and BTC transfers to exchanges could push Bitcoin into an extended downtrend in 2026, with some forecasts seeing BTC price returning to as low as $58,000.
