Bitcoin Rebounds But Faces Critical Supply Barriers

Bitcoin’s recent 12% rally from the $80,000 low marks a brief moment of market relief following what analysts describe as the largest short-term holder capitulation in Bitcoin’s history. This wave of realized losses was characterized as fast, aggressive, and record-breaking, leaving many investors questioning whether the current recovery represents a sustainable trend or merely a temporary bounce within a broader downtrend. The intense period of selling pressure created an environment where fear and uncertainty continue to dominate market sentiment, even as prices show signs of stabilization.

According to new data from Glassnode, the path ahead remains challenging despite the recent price improvement. The market is now entering a critical phase where Bitcoin must demonstrate its ability to overcome significant technical and psychological barriers. The recent rebound to the $91,500 area following the deep wick to $80,000 last week signals that buyers are finally stepping in at key support levels, with the weekly candle showing a long lower shadow—a classic technical indicator of demand absorption during heavy selloffs.

Glassnode reports that Bitcoin is now approaching two major supply clusters that will play a decisive role in determining whether the recent rebound can evolve into a sustained recovery. The first cluster sits between $93,000 and $96,000, while the second—much larger and more structurally important—spans $100,000 to $108,000. These zones were formed by heavy buying activity earlier in the cycle and represent areas where many investors are currently underwater or sitting near breakeven.

Because of this dynamic, Glassnode notes that these ranges typically act as strong resistance, as recent buyers who endured the latest drawdown may choose to sell once the price returns to their entry levels. This creates temporary supply walls that can slow down momentum even during aggressive recovery periods. Bitcoin’s ability to break through these clusters will determine whether it can re-establish a path toward a new all-time high or remain trapped under heavy distribution pressure.

The market is now closely watching how BTC behaves as it approaches these critical levels. A clean breakout above these supply zones would signal renewed confidence and potentially validate the recovery, while rejection could indicate that the broader corrective structure is not yet complete. The $92,000 to $94,000 range represents a particularly important near-term resistance level that could determine the short-term trajectory.

Despite the recent bounce, Bitcoin’s broader technical structure remains fragile. The price is currently trading below the 50-week moving average, a level that previously acted as reliable support throughout the bull phase. Losing this dynamic support earlier in the month represented a significant technical break, and BTC is now attempting to reclaim it from below—typically a challenging move that often acts as resistance rather than support.

The 100-week moving average around the mid-$80,000 region has proven critical in halting the recent decline, serving as the primary area where buyers defended the broader trend. As long as BTC maintains support above this zone, the market avoids confirming a deeper macro reversal. Volume remains elevated, reflecting capitulation-level activity that characterized the recent selloff, indicating that the market remains in a decisive phase where direction could be determined by key technical levels.

A sustained close above the $92,000 to $94,000 range would significantly strengthen recovery prospects and potentially set the stage for a test of the higher supply clusters. Conversely, rejection at these levels would risk another retest of the $80,000 support zone, potentially reigniting concerns about a broader market correction. The coming weeks will be crucial in determining whether Bitcoin can overcome these substantial technical hurdles or faces continued distribution pressure from investors looking to exit at breakeven.