On-Chain Metrics Signal Bitcoin Bulls Lack Firepower for Sustained Breakout

Bitcoin weathered a geopolitical stress test triggered by Middle Eastern tensions, yet on-chain indicators suggest bulls lack the momentum needed for a meaningful mid-term advance. Analysts at Glassnode flagged the disconnect between price action and underlying market structure.

Accumulation Forming, but Foundation Is Thin

Glassnode identified an accumulation cluster taking shape in the $62,000–$72,000 price range. However, the intensity of buying activity falls short of historical phases that preceded sustained rallies.

"An accumulation cluster is forming in the $62k–$72k range. However, its intensity is modest relative to prior phases that preceded sustained expansions. Conviction is building, but the foundation for a mid-term breakout remains thin so far." — glassnode (@glassnode), original post

A critical metric reinforces the cautious outlook: the Short-Term Holder (STH) Supply in Profit has dropped below 50%. This means the majority of recent BTC buyers are currently sitting on unrealized losses — a hallmark of bear market conditions, according to Glassnode.

"A hallmark of bear markets: STH Supply in Profit falling below 50%, meaning the majority of recent buyers are underwater. Demand-side risk appetite tends to remain suppressed until this flips back above 50%. Watch this level as a precondition for any sustained recovery." — glassnode (@glassnode), original post

Until this indicator reclaims the 50% threshold, demand and risk appetite are likely to remain suppressed, the analysts emphasized.

Why This Matters

The current market environment reveals a gap between Bitcoin's short-term price performance and its on-chain fundamentals. Despite trading near ~$72,300 with a 2.7% daily gain, structural metrics point to fragile positioning for bulls. For both retail and institutional participants, these signals highlight elevated risk in initiating long positions at current levels.

BTC/USDT hourly chart on Binance. Source: TradingView

Hidden Resistance From Mid-Term Holders

CryptoQuant analyst Sunny Mom identified an additional headwind. The most concerning cohort consists of investors who have held bitcoin for six to twelve months. Their average entry price clusters around $100,000 — well above current levels. These holders are carrying substantial unrealized losses, and as long as their cost basis curves trend upward, they create significant overhead resistance.

"Is BTC Bottom In? Not Quite. 'We are at a Value Bottom for long-term DCA, but a Structural Bottom has yet to form. Expect volatility between $60k–$70k.'" — CryptoQuant.com (@cryptoquant_com), original post

The MVRV ratio hovers near 1.2 — historically an attractive zone for "smart money" to begin dollar-cost averaging. Yet true cycle lows have typically been accompanied by MVRV dipping below 1.0, a threshold the market has not yet reached.

Another structural gauge is the share of coins unmoved for over two years within realized capitalization. A sustainable bottom typically forms when this metric exceeds 20%; it currently sits at roughly 15%. Sunny Mom noted that structural support from long-term holders remains weak, pointing to a fragile market floor until this cohort reasserts dominance.

Two Scenarios for the Cycle Bottom

The analyst outlined two paths through which a definitive cycle low could materialize:

• "Black Swan" event — A sharp crash triggers cascading forced liquidations, flushing out capital that entered at peak levels. This would be a fast but painful route to a hard bottom, potentially playing out over one to two months.
• "The Great Boredom" — Institutional investors hold their positions while Bitcoin grinds sideways in the $60,000–$80,000 range. Over time, newer capital ages into long-term holder status. Under this scenario, a meaningful recovery could be delayed until late 2026 or even early 2027.

In the near term, Sunny Mom expects volatility within the $60,000–$70,000 corridor. At the time of the original report, BTC was trading near $72,300, up 2.7% over the preceding 24 hours.