Bitcoin (CRYPTO: BTC) is setting up well for a rally in 2026, backed by several bullish technical indicators and receding sell pressure.
What Happened: Glassnode data shows that profit-taking pressure has largely subsided, allowing Bitcoin to rebound from around $87,000 into the mid-$90,000 range.
The move reflects exhaustion on the sell side—particularly among long-term holders—and signals a stabilization phase following the distribution seen in the fourth quarter of 2025.
However, upside momentum now faces substantial overhead supply between roughly $92,000 and $117,000, where many recent buyers are sitting near breakeven.
Absorbing this supply is expected to take time and remains a key obstacle to a sustained bullish continuation.
A critical level to watch is the short-term holder (STH) cost basis near $99,000.
A sustained move above this level would signal renewed confidence and trend recovery.
Failure to reclaim it increases the risk of an extended consolidation or bearish phase, as recent buyers remain modestly underwater.
Why It Matters: Glassnode highlights several off-chain dynamics that point to improving—but still cautious—conditions:
- Corporate treasury demand remains opportunistic and highly price-sensitive, providing downside support rather than acting as a primary trend driver.
- U.S. spot Bitcoin ETF flows have turned positive again, signaling an early return of institutional spot demand.
- Futures open interest is rebuilding gradually, suggesting rising risk appetite without signs of excessive leverage.
Derivatives markets also show signs of normalization. Implied volatility appears to have bottomed and is beginning to rise modestly, though it remains compressed. Positioning is increasingly skewed toward call options, reflecting a cautious but constructive shift in trader sentiment.
A record options expiry recently cleared roughly 45% of open interest, removing price-pinning effects and providing a cleaner signal on underlying market sentiment as Bitcoin moves further into 2026.
Image: Shutterstock
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