Bitcoin rebound reaches decision point at $69K as short-term holder costs come into focus

Original author: Glassnode

AididiaoJP, Foresight News

• Escalating tensions in Iran have triggered a surge in oil prices, while stock markets have shown flat or declining performance; Bitcoin, however, absorbed this shock and outperformed the two major stock indices for the second consecutive week.
• For the first time in five months, core inflation showed a downward reading, just one week before the FOMC meeting, while policy rates remain above inflation, maintaining a restrictive stance.
• The 10-year U.S. Treasury yield has returned to its high range, while the dollar remains relatively stable; the ceiling formed by the yield and the dollar has yet to be lifted.
• The price has entered a decision zone: above lies the short-term holder cost basis at approximately $69,000, and below lies the strongest demand support zone in the market.
• Supply near the current price is tilted toward support, net inflows to exchanges continue to weaken, and the profit-taking pressure needed to halt the rebound has not yet accumulated.
• Accumulation activity has narrowed to a high-conviction group of 1,000–10,000 BTC; breadth remains an missing piece on-chain.
• On the over-the-counter level, the signals tracked in this report have finally materialized: ETF fund flows have turned positive, the price has risen above the maximum pain level, and hedging positions have dropped to multi-month lows.
• Altcoins are again weakening against Bitcoin, with capital flowing toward the leaders; the market compass reading also indicates: in recovery, but still within a low risk-on zone.

Protect against oil price shocks

This week’s macro test comes from the oil market. WTI crude surged due to escalating tensions in Iran, and such external shocks typically weigh on risk assets overall. Yet the stock market reacted mildly: the S&P 500 ended the week slightly lower, while European markets remained flat. Bitcoin, however, continued its upward trajectory amid the same shock, marking its second consecutive week outperforming the two major indices. A market that rises despite bad news suggests that marginal selling pressure has largely been exhausted—this resilience itself is a signal.

Inflation has finally bowed down

Core inflation fell for the first time in five months, reaching its closest level to the target since the 2022 high. While a single data point does not constitute a trend, the timing is ideal: as the FOMC meeting approaches next week, the federal funds rate remains over 100 basis points above core inflation.

This gap reflects the implementation of restrictive policies and provides the Federal Reserve with room to maneuver. If the Fed signals a rate cut, it will remove one of the macroeconomic brakes tracked throughout this report; if it remains silent, the market will continue to rely solely on crypto-native momentum.

Yields rise as the dollar takes a breather

The bond market did not cooperate. The 10-year U.S. Treasury yield returned to near its recent high, continuing to pressure all risk assets, while the dollar remained relatively muted, well below its winter highs.

The upper ceiling of this cycle is clearly visible: the 10-year yield above 4.45% and the USD Index above 99. The dollar side is nearing a breakout, while the yield side has not yet broken through. A simultaneous breakdown of both remains the key macroeconomic release valve.

Reach the decision zone

After rebounding from its late-June low, the distribution of supply above and below Bitcoin’s price has become the central narrative. Above, the short-term holder cost basis sits at approximately $69,000—the breakeven line for buyers over the past five months. Below, the strongest demand support zone on the chart, accounting for roughly one-tenth of total supply, is concentrated near $63,000 (the median coin’s last transaction price). The realized price floor lies significantly lower still.

The asymmetry of the first wall has long been familiar to the market: during a downtrend, as price approaches from below, the breakeven level of recent buyers often becomes a zone of selling pressure, as holders most eager to sell are just about to recoup their costs. Once breached, an “air pocket” forms above until the $84,000 level. A successful reclaim would encounter thin resistance in this range, enabling a rapid repricing; if it fails, the support band below will become the next target for testing.

Support strength is converging toward the test zone.

Supply near the current price is aligning. Weighted cost basis data shows that nearby positioning is divided into support below and resistance above the current price, with the support portion just exceeding the resistance side—marking a potential reversal from a resistance-dominated pattern since spring.

A rebound encountering resistance still requires selling pressure, but the fuel has not yet been fully loaded. A classic trigger signal is when the percentage of profit-taking supply from short-term holders exceeds 54%—enough recent buyers have broken even to enable large-scale selling. Currently, this metric is far from reaching that level, and the short-term holder SOPR remains stable near the break-even line rather than turning downward. Recent buyers are neither exuberant nor exiting.

Selling pressure gradually subsides

The exchange "revolving door" has slowed. At the beginning of June, when the market broke down, exchanges saw a large net inflow of positions—indicating that potential selling pressure reached the exchanges. This wave of inflows has weakened for several consecutive weeks and is now only a fraction of its peak.

Inflow has weakened without a dominant outflow, indicating a neutral stance: demand is absorbing the supply, but the structural withdrawal trend typical of a healthy market has not yet returned. A key confirmation signal to watch for is sustained net outflow—something the ETF channel has just begun to provide on-chain.

Strong conviction but lacking breadth

The June rebound was driven by broad accumulation: accumulation trend scores covered all wallet groups at the lows. Over the past two weeks, however, buying has narrowed to the 1,000–10,000 BTC range—historically, these wallets have often led sustained reversals, while the mid-tier groups have reverted to distribution.

Concentrated accumulation has both advantages and disadvantages. The strong conviction of large, patient wallets has often led market recoveries; however, a market supported solely by a single group is more fragile than one with broad participation. The return of breadth in the next uptrend will be key to distinguishing a squeeze from a true trend.

Redemption streak ended

For several weeks, every improvement came with the same condition: derivatives optimism, but persistent outflows from the ETF channel. U.S. spot Bitcoin ETFs have now turned to net inflows—the first sustained period of net buying since the redemption wave ended in June.

Last week’s report noted that institutions had stopped fleeing but had not yet begun buying. The current reversal is still in its early stages and modest in scale, yet it has transformed a purely derivatives-driven rally into one supported by spot demand. Persistence, not scale, is what matters most to watch.

The platform's biggest pain point

The maximum pain point—the price at which the most options positions expire worthless—has acted as upward resistance throughout the spring. Last week, Bitcoin approached from below and has now risen above this aggregated level, significantly higher than its position at the February low.

Historically, resolving the largest pain points has often coincided with a shift toward a more favorable options market environment, though such transitions are typically gradual. If prices remain above this level during the upcoming options cycle, dealer hedging flows will act to dampen volatility rather than amplify it, transforming the “pain point” from a ceiling into an anchor.

Hedge unwound, short position fails

Since the June low, each report has tracked the same quiet process: traders closing out short positions and letting downside protection expire. The market has now loudly confirmed it: the one-week 25-Delta skew has plunged to its lowest level in months, with the front end of the curve abandoning downside protection most rapidly, followed closely by the one-month tenor.

The bearish/bullish composite indicator confirms this trend: the open interest bearish/bullish ratio has dropped to its lowest level this year, and the volume ratio has halved since the June hedging peak; the perpetual contract funding rate has been below the neutral line every day over the past month.

This optimism stems from the unwinding of hedging positions, not from new leverage accumulation. Liquidations based on this type of position tend to be milder during pullbacks compared to those driven by funding rates.

Altcoins bleed, Bitcoin leads

Beneath the surface, capital continues to favor leaders. Altcoins at all levels have been weakening against BTC for years; this long-term decline plateaued this spring, forming the most constructive altcoin bottom of the bear market. Last week, this slow decline quietly resumed: as Bitcoin rose, low-market-cap coins further ceded ground against BTC.

This is a healthy rotation pattern. Bitcoin leads the way, first drawing capital into the most liquid asset, then spilling over to others; early altcoin leadership is often a sign of a bubble. A sustainable recovery requires holding the bottom and having Bitcoin lead the way.

Before proving itself, this remains a bear market rally, and the proving ground is clear. The short squeeze has done everything a squeeze can do: hedge unwinds, short covering, stable funding rates, and ETFs shifting from drag to support. But it has not yet cleared the resistance above. This week, Bitcoin remains below the $69,000 short-term holder cost basis, with an air pocket and the $84,000 level above, and a demand support zone at $63,000 along with a still-forming support structure below.

If a decisive reclaim of 69K occurs amid sustained spot inflows, the upside pocket will open; if resistance is encountered and exchange inflows reappear, the market will retreat to test the support zone.