Bitcoin (BTC) hit nearly $98,000 overnight, but has risen about 5.5% in recent trading to settle around $96,000. This rally has reignited a familiar question: Is this a setup for a sustained rally above $100,000, or is it another fragile push based on a thin order book and positioning game?
Market capitalization $1.9 trillion
24 hour volume $25.1 billion
Best ever $126,173.18
Glassnode’s latest analysis reveals a delicate picture in which mechanical positioning has driven recent movements while broader structural demands remain uneven and liquidity remains compressed.
Supply meets demand at a critical threshold
Current prices sit within a dense cluster of long-term holder supply built up between April and July 2025, ranging from approximately $93,000 to $110,000.
Glassnode’s cost-based distribution heatmap shows this overhead supply zone where recovery has repeatedly stalled since November. With each attempt, they face new selling pressures and are unable to maintain the structural recovery in prices.
This region has consistently acted as a transition barrier, separating correction phases from sustained bull markets.
The cost basis for short-term holders is now $98,300, reflecting the average entry price for recent buyers. Glassnord points out that historically, regaining and sustaining this level signals a transition from a correction phase to a more durable uptrend.
Prices continue to need to consolidate above $98,300 to restore confidence and lay the foundations for sustained momentum.
The behavior of long-term holders provides the context for the amount of indirect supply that the market must absorb. Long-term holders remain net sellers, but the distribution rate has slowed significantly from the aggressive selling seen throughout the second half of 2025.
Glassnode reports that long-term holders are currently realizing a net profit of approximately 12,800 BTC per week, which is down from the cycle peak of over 100,000 BTC per week.
This suppression suggests that profit taking, while still active, is much less aggressive than in previous distribution stages.
The flow of funds from institutional investors has stabilized and the spot market has improved.
The flow of institutional investor balance sheets has been completely reset.
Net inflows have stabilized after a prolonged period of outflows across spot ETFs, corporates, and government entities. Spot ETFs turned positive and re-established themselves as major marginal buyers.
Bitcoin ETFs recorded net inflows of $1.5 billion in January, with nearly $1.6 billion recorded between January 13 and 14, according to data from Pharcyde Investors.
Spot market behavior has been constructive. Cumulative volume delta measurements on Binance and general exchanges have returned to a buy-dominated regime, reflecting a shift away from sustained sell-side pressure.
Coinbase was the most consistent source of sales throughout the integration, but it significantly slowed down its distribution.
While spot participation has not yet shown the sustained, aggressive accumulation typically seen in a full trend expansion phase, the transition to a net long position indicates a constructive structural change.
The machine moves on a thin volume
A short liquidation mechanically strengthened the push into the $96,000 area, but it unfolded on relatively thin derivatives trading volumes.
Glassnode notes that futures trading volumes remain well below the active trading seen through most of 2025.
This breakout occurred in a relatively illiquid environment where modest positioning changes caused disproportionately large price reactions. As a practical matter, it didn’t take a lot of new capital to force short sellers out of the market and drive prices up through resistance.
This dynamic is directly related to liquidity issues seen in the order book. Total market depth was 2%, down about 30% from its 2025 high, data provider Kaiko said.
On Binance in particular, 1% depth peaked at over $600 million in October 2025, but fell below $400 million by December 20th. Thinner books amplify price movements and make the tape more sensitive to large flows and strategic positioning.
Blockchain data adds texture to this story.
On December 31st, market maker Wintermute net deposited 1,213 BTC to Binance, with transfers concentrated during periods of low activity.
Making large exchange deposits during thin hours increases the risk of having a major impact on the tape, especially if the book lacks depth.
However, operational framing has its limits. Although a widely circulated claim on December 30th alleged “multi-billion dollar manipulation,” the total amount of on-chain transfers mentioned was less than $30 million.
The sharp intraday movement is better explained by a combination of structural weakness and stop-hunting rather than a provable adjustment scheme.
$100,000 as a mechanical attractor
The $100,000 level is at the convergence point where the cost basis, option exposure, and dealer hedge match. Coin Metrics notes that call interest is concentrated around the $100,000 strike price with an expiration date in late January.
According to a report from Glassnode, dealers are shorting Gamma at about $95,000 to $104,000, potentially increasing the upside as they hedge by buying spot or futures if the price rises.
In a short gamma environment, hedge flows will not be able to absorb price fluctuations. Instead, they strengthen them.
This structure creates fragile stability. Volatility may remain low while prices are suppressed, but once momentum is built, moves are more likely to accelerate than weaken.
Spot trading is taking place around $95,000 to $96,000, with price moving into the short gamma zone, where sustained action supported by volume is likely to trigger directional hedge flows.
Option activity near the $100,000 strike highlights conditional upside expectations. For short-to-medium maturities up to approximately three months, buy call premiums significantly exceed short call premiums, indicating strong demand for near-term upside risk.
In contrast, longer maturities showed the opposite movement, with richer call premiums on the outside of the curve being used as opportunities to sell on top.
This split suggests that the market is bracing for the possibility of retesting the $100,000 area, while at the same time being hesitant to continue to accept above that level for a longer period of time.
Volatility is deferred, not resolved
Implied volatility remains low across the curve, with Deribit’s DVOL measurements hovering around the 40s.
However, this interpretation masks an underlying vulnerability. Skew is still pricing in downside risk, and a 25-delta skew is still biased toward puts, especially at intermediate and longer maturities.
This reflects a market that is comfortable with maintaining exposure, but unwilling to go without insurance.
The coexistence of low volatility and negative skew highlights an important tension. Although participants do not anticipate an immediate decline, they continue to pay for asymmetric protection.
Volatility gradually increases with maturity, suggesting that uncertainty is allocated to time rather than specific short-term factors, consistent with a market expecting short-term stability while being exposed to potential risks.
$100,000 test
If Bitcoin is indeed poised for a sustained rally above $100,000, two conditions need to come into place.
First, the price needs to recover and sustain above its short-term holder cost basis of $98,300, allowing recent buyers to recoup their gains and reducing the incentive to sell on a rebound.
Second, we need to simultaneously improve liquidity and flow. While ETF inflows remaining positive provides one signal, stabilization in depth is more important. If Binance’s 1% depth regime below $400 million continues, the market will remain vulnerable to the whip.
Profit-taking has cooled, distributions from long-term holders have slowed, and typical late-cycle euphoria indicators are no longer flashing red. However, liquidity vulnerabilities introduce wildcards.
The order book is noticeably thinner compared to the October highs, and large flows during periods of low activity could result in unusually large tape movements.
The $100,000 level is important because it is where multiple structural forces converge, including cost base, option exposure, and dealer hedging, and it becomes a natural attraction once conditions stabilize.
Whether Bitcoin can regain and hold $100,000 depends less on the story and more on whether the market can rebuild depth while maintaining positive momentum. The indicator is green, distribution pressure has eased, and institutional demand is stable.
However, the mechanism remains fragile and recent movements have occurred in thin volumes with mechanical support from short covering.
This is the current situation, where even modest capital can create significant movement, but deeper subsequent accumulation is required to achieve sustainability.
(Tag translation) Bitcoin
