Bitcoin holds $63K and $86K range as profit-taking risk builds

Bitcoin's (BTC) recovery faces growing resistance as the market trades between a major accumulation zone below current prices and a dense concentration of potential supply overhead, according to a Glassnode report published Wednesday.

Bitcoin faces key support and supply zones as prices consolidate

After climbing above $80,000 on August 27, BTC encountered sustained selling pressure and retreated toward $76,000, triggering a series of long liquidations. The reversal has left the market positioned between two major liquidity zones.

The report stated that Bitcoin's recent rally cleared short positions as the top crypto moved higher. However, it failed to reach a dense cluster of short liquidations between $83,000 and $86,000.

At the same time, a substantial band of long liquidation liquidity remains below the market between $60,000 and $63,000.

“Identical nominal prices now activate a larger volume of profitable coins, creating an expanded pool of latent sell-side liquidity when spot tests prior highs,” Glassnode wrote.

Bitcoin's onchain supply distribution also supports the range. Glassnode identified an accumulation floor between $62,000 and $65,000, formed during the summer consolidation period, while heavy Long-Term Holder (LTH) supply sits overhead between $83,000 and $86,000.

However, the distribution of profitable supply adds another challenge to the recovery. When Bitcoin traded near $78,000 in May, approximately 65% of the circulating supply was held in profit. When the price returned to the same level in late August, that figure had increased to 68%.

“This shift reflects summer accumulation that reset the Short-Term Holder Cost Basis near $71K,” Glassnode stated.

Meanwhile, the derivatives market reflected a rapid cooling in short-term sentiment.

Glassnode noted that the seven-day 25-delta skew index rose sharply during Bitcoin's recent squeeze as traders increased demand for upside calls. The measure subsequently moved back toward neutral after the rally encountered resistance.

The rapid reversal suggests that short-term enthusiasm has moderated following the failure to sustain the move above $80,000.

However, longer-term positioning has remained comparatively stable. The 180-day skew showed little movement during the rally and subsequent pullback, suggesting demand for longer-term optionality remains intact despite cooling near-term sentiment.

Attention is also turning toward the September 25 quarter-end options expiry. Glassnode said the expiry represents about $14 billion in open interest across Deribit and IBIT.

With significant open interest concentrated at strike prices above $80,000, the expiry could become an important source of volatility and positioning pressure in the coming weeks.

BTC is trading at $77,060, down 0.2% in the past 24 hours at the time of writing.