Bullish momentum wanes, volatility weakens, Bitcoin remains locked in the $60,000 to $70,000 range

Article by: Glassnode

Compiled by: AididiaoJP, Foresight News

Bitcoin is still trading in the $60,000 to $70,000 range. The spot market is showing early signs of absorption, and the derivatives market has completed its reset. Volatility has cooled somewhat, and the positioning structure is moving toward balance. However, because there is no clear catalyst, the market lacks the confidence needed to achieve a sustained breakout.

Summary

Bitcoin is still stuck in a wide $60,000 to $70,000 range. URPD data shows that there is a dense supply buildup in the $80,000 to $126,000 range. To digest this supply buildup, it may require a larger price discount to attract new buyers, or a longer period of redistribution.

The total supply in a loss position is approaching 8.4 million BTC, which is similar to the market structure seen in Q2 2022. Back then, the market needed to redistribute roughly 3 million BTC in order to return to the cycle midpoint.

Realized losses by long-term holders have been rising steadily since November 2025 and have now reached a level of about $200 million per day, confirming that active capitulation is taking place. If this indicator cools down to below $25 million per day, it would be a key threshold for the market to form a bottom.

The Coinbase spot cumulative transaction volume differential has turned into a slightly positive value, suggesting that spot buyers are beginning to absorb sell-side pressure. However, the current demand level is still far below what is typically seen when a market forms a durable local low.

Treasury/treasuries cash flow has become more concentrated: Marathon has distributed about 15,000 BTC, while Strategy remains the only institution that is continuously making large-scale purchases.

Directional premium in the perpetual futures market has compressed to around a neutral level, and is slightly below zero. This reflects the reset of long leverage and a cooling of speculative enthusiasm.

The current positioning in perpetual futures is far from being momentum-driven. Long exposure is being closed, and open interest on the short side is resurfacing. This makes the overall futures market more balanced, but also more cautious.

Implied volatility has continued to soften across the entire term structure, indicating that the options market is pricing a calmer environment in the near term and a decreased demand for volatility exposure.

The skew indicator has started to tilt downward again, showing a return of defensive positioning. However, its level is still far below the level usually associated with stronger hedging demand.

Gamma positions have returned to a state that supports the market, reducing the convexity effect when prices fall. It also suggests that after the recent negative-gamma phase, market makers’ short-term positioning has become more stable.

On-chain insights

Unrealized loss supply volume

As prices consolidate in the $60,000 to $70,000 range, this report will step beyond short-term price dynamics to assess the structural forces shaping the current market environment. As described in recent reports, one of the most persistent resistances suppressing momentum comes from the large supply bought above $80,000, which is currently in an unrealized loss state.

This cohort has endured more than six months of a bear-market environment and faces a binary set of behavioral choices: (1) sell during any rebound to reduce further losses; or (2) capitulate psychologically as the price pullback deepens.

The URPD charts make this clear. They show that within the $80,000 to $126,000 range, there is a distribution-dense supply cluster hanging firmly above the market price. To resolve this supply buildup, it is likely necessary to attract new buyers through a significant price discount, or to allow a longer period of time for these coins to transfer from holders in unrealized-loss positions to more steadfast new holders.

Loss supply volume

To quantify the assessment of the supply buildup overhead, we can use the metric “Total supply in a loss position.” It counts the amount of circulating bitcoins whose last moved price was higher than the current spot price. After being smoothed with a 30-day simple moving average to remove short-term noise, this metric is currently about 8.4 million BTC, meaning that over the past month, roughly 8 million to 9 million coins have been in a loss position.

The scale of this figure, together with the fact that the spot price is trading near the midpoint of the current cycle, implies that the market structure is similar to what was observed in Q2 2022. Historically, resolving a supply buildup of this magnitude requires reallocating a large portion of coins from loss holders to new buyers entering at lower prices. The precedent from the 2022 bear market is instructive. Typically, only after the total supply in a loss position compresses from above 8 million BTC to around 5 million BTC does the market decisively return above the cycle midpoint. This means that before market conditions normalize, about 3 million coins have changed hands.

Tracking ongoing redistribution

After determining the size of the loss supply that needs to be redistributed, the next step is to monitor the pace of this process. The metric “Realized loss by long-term holders” measures the total realized losses of investors who have held for more than six months and are now selling below their initial cost basis. This metric directly captures the active redistribution process of the overhead supply described above.

The 30-day moving average of this indicator has been rising steadily since November 2025 and is currently at a high level of about $200 million per day. This confirms that long-term holders are increasingly capitulating into the current market. Although this wave of realized losses is a necessary and constructive step in the bear-market cleansing process, by itself it is still not sufficient to constitute a full market reversal. If the indicator can cool meaningfully to a level below $25 million per day, that would represent a more convincing signal of seller power exhaustion—and a prerequisite for the market to form a bottom before a sustainable bull market begins historically.

Off-chain insights

Coinbase spot demand returns

The spot market shows signs of initial stabilization. In the latest data, the 30-day moving average of Coinbase spot transaction volume differentials has turned into a slightly positive reading. Previously, it experienced a long stretch of negative values in January and the early part of February, when sustained sell-side pressure reflected ongoing distribution.

This recent shift suggests that as the price stabilizes, buyers are starting to absorb the available supply and provide support. However, the magnitude of the positive differential remains modest, indicating that current demand is still tentative rather than driven by strong conviction.

Historically, a stronger market recovery requires that spot fund flows remain consistently positive, whereas short-lived buying activity often fails to produce follow-through for the next leg of the move. At present, the recent uptick is constructive, but a more persistent recovery may require continued expansion of buyer pressure.

Treasury cash flows turning more complex

In recent months, the broad base supporting treasury cash flow has weakened significantly. The latest data shows a more imbalanced and selective pattern of activity. In the early stage of the cycle, corporate coin hoarding was supported by a wider set of allocators. However, recent fund flows indicate that buy-side support is becoming increasingly concentrated.

Most notably, Marathon has sold about 15,000 BTC, which is one of the clearest examples of reduced corporate treasury exposure rather than increased exposure recently. In contrast, Strategy appears to remain the only sustained structural buyer; even if other companies’ participation becomes more sporadic, it continues to buy on a regular basis.

This shift points to a major change in market structure. Corporate demand is no longer part of a broad corporate coin-hoarding trend; it appears narrower and more dependent on a single dominant participant. The end result is that while corporate buying is still present, its base is less broad—so compared with the early phase of the cycle, the reliability of corporate buying as a source of structural support has declined.

Perpetual premium reset

The directional premium in the perpetual futures market continues to compress. The 30-day total is currently near the neutral level and slightly below zero. This marks a clear cooling from the previously bullish conditions that supported the rally.

This shift suggests that bullish speculative positioning is being closed, and short-side open interest is beginning to resurface. The current structure does not reflect strong market conviction; instead, it points to a more cautious and balanced perpetual futures market environment.

Historically, resets in directional premium are often accompanied by consolidation or trend exhaustion. This is because after a longer run, leverage is repriced. In this sense, the recent drop in premium indicates that speculative appetite has faded, allowing the perpetual market to complete a thorough reset as leverage weakens.

Volatility expectations are declining

After the positioning in the options market completes its reset, implied volatility is the first place where changes become apparent. Bitcoin’s volatility term structure overall has moved downward versus last week, with the front-end terms leading the decline. One-week at-the-money implied volatility is currently 51%, and the three-month term is 49%. Implied volatility for other terms is clustered closely between them, with the six-month term at 49.8%, pointing to a notably compressed term structure.

This reflects a market that is dialing down expectations for large volatility in the near term, even though uncertainty remains in the macro backdrop. Volatility for longer tenors receives relatively stronger support, indicating that uncertainty has not disappeared—it has simply been pushed further out on the time dimension. In the short run, pricing is shifting toward a more convergent volatility regime because the market lacks immediate catalysts, and demand for options flexibility has diminished.

Downside protection begins to rebuild

As volatility expectations soften, the skew indicator reveals a shift in positioning toward a more cautious direction. The higher the 25-delta skew (calculated as put options minus call options), the more the market’s pricing favors downside protection. Last week, the one-period skew set a monthly new high of 22.7% before the pullback, reflecting its sensitivity to immediate price action. By contrast, skew for longer tenors continues to rise and stays at elevated levels: 1-month is 17.4%, and 6-month is 13.2%.

This divergence across tenors is highly informative. Although recent price stabilization eases short-term hedging demand somewhat, medium- and long-dated protective options still have strong buy-side demand. The market is not pricing large volatility aggressively, but the entire term structure consistently assigns more weight to downside risk. This points to a persistent defensive bias rather than a temporary reaction to short-term market volatility.

Short-term Gamma below market levels

This more defensive positioning structure becomes more relevant when mapped to market makers’ gamma exposure. Negative gamma is currently stacked below the current price level, extending from $68,000 down to above $50,000. This means the market is buying put options below the current price and does not expect a rebound to last for very long in the near term, which forces market makers to be the counterparties to these trades.

Under this mechanism, market makers would have to sell as prices weaken, amplifying downside volatility. Because liquidity remains thin after the March 27 contract expiry, the overall market structure appears relatively fragile. Once prices enter this area, the downward momentum could be intensified, potentially triggered by the “hedging flow” boost—turning what might have been a gradual move into a more aggressive repricing, and possibly retesting the $60,000 level—the low point from the February 5 selloff.

Realized volatility subdued, masking fragility

Another factor making the current setup less stable is that implied volatility remains higher than realized volatility. In the front-end tenors, one-week realized volatility is 38%, while one-week implied volatility is 49%, leaving an 11 percentage-point gap. This gap has persisted for more than three weeks, indicating that options pricing has consistently been above the actual level of market volatility.

At first glance, this may reflect a seemingly stable market, since realized volatility remains within a manageable range. However, persistent premium suggests that even without actual follow-through in price direction, market participants are still pricing risk—pointing to an environment with low market confidence.

With volatility priced above realized volatility and gamma being negative, even relatively small sell pressure could be magnified in its effect on price movement. This is because the market can quickly adjust from a compressed pricing base, and there is limited capacity in the positions to absorb fund flows.

Conclusion

Bitcoin remains locked in the wide $60,000 to $70,000 range. The market shows signs of initial stabilization, but it still lacks enough momentum to decisively break out in either direction. On-chain conditions still reflect a market that is in the process of repair: the supply in loss positions remains elevated, and long-term holders’ capitulation has not fully cooled. Meanwhile, spot demand is starting to show improvement, indicating that sellers no longer fully control the market.

In the off-chain market, conditions are balanced as well. Corporate funding demand has narrowed significantly, perpetual futures leverage has completed its reset, implied volatility has softened, and market makers’ positioning stability has improved. Together, these signals point to an environment that is no longer under obvious pressure, but still needs to find stronger market conviction.

At the moment, Bitcoin appears to be undergoing a redistribution phase rather than exiting a clear trend. Until spot demand expands more meaningfully and the overhead supply buildup begins to clear, range-bound consolidation is expected to remain the market’s main feature.