Glassnode Analysis: Bitcoin Price Faces Key Support Test Near $110K, Potential Dip Seen as Short-Term Holder Profit-Taking Looms
Key Takeaway: Bitcoin fell below $110,000 after Glassnode research identified a significant cost basis gap ($110K-$115K) that could trigger downward pressure if the market pulls back. Short-term holders could cap potential upside at around $140,000 in the event of a sustained breakout.
In-depth Analysis: A “Critical Low” Area Emerges
Crypto analytics firm Glassnode has identified a major price vulnerability for Bitcoin as the market reappraises its recent gains, according to its latest “The Week Onchain” newsletter.
According to Glassnode, short-term holders (STHs), defined as those hodling Bitcoin for up to 155 days, could be poised to trigger a “significant pullback,” potentially pushing the price back down to $110,000.
These holders often anchor price support at levels corresponding to their average purchase price, or “cost basis,” as Glassnode explained:
“Examination of Bitcoin’s Cost-Basis Distribution shows a dense concentration of investor positions formed around the $117k-$122k region. Critically, there exists a notable volume gap just below the current price, spanning from $115k to $110k. This occurred because the rapid price rise prevented extensive trading and accumulation in this lower zone.”
This $110k-$115k area represents an “air-gap” with little market volume, meaning there’s insufficient buying interest at these levels should the price attempt to decline.
The “Gravity” of the Void
Glassnode described a “gravity” associated with this gap. Without volume backing, a decline to fill this void becomes probable, a pattern seen historically in markets, including CME Group’s Bitcoin futures complex.
“Whether this gap closes depends on market dynamics. However, this area holds particular significance. If prices pull back, one crucial question will be whether support materializes—or fails to appear—beyond $110k,” analysts noted.
STH Purchase Cohorts: Glassnode breaks down the STH cost basis by acquisition period, outlining a potential ladder of support levels where batched investors might choose to cash out and realize their gains.
Upward Trajectory Encumbered by STH Profitability
If Bitcoin were to convincingly break above current resistance and rally, the path upward could be limited by the profit-taking intentions of the newly accumulated short-term holders themselves.
“Market participants must consider that, should the price rise from its current position, buy signals generated by STH profit-taking may define the early stages of a new market phase. A book of stops, or sell-side pressure, is anticipated.”
Specifically, Glassnode uses standard deviation analysis to pinpoint a potential local resistance level around $140,000:
“The +2σ (two standard deviation) band around the prevailing support structures aligns closely with the $141K region. Should the market breach this established resistance threshold, significant sell-side pressure could emerge from STHs who reached breakeven around this price, limiting further upside momentum,” Glassnode summarized.
This analysis suggests $140,000 – $150,000 as a potential cap on Bitcoin’s immediate ascent if a breakout occurs.
[Insert Placeholder for Chart 1: Bitcoin Cost Basis Distribution Heatmap (Source: Glassnode)]
In Summary: Heightened Vigilance Required
Glassnode emphasizes the two-way implications of its analysis:
- Downside Scenario: A market correction presents an opportunity to test the $110k-$115k gap, where resistance from STHs could delay the formation of new significant bottoms.
- Upside Scenario: A successful breakout sees an immediate target emerge at approximately $140,000, where the concentrated positioning of recently acquired STHs poses a natural barrier.
“Monitoring these specific cost basis levels is therefore paramount for understanding both potential resistance zones during an uptrend and crucial support valves during periods of drawdown,” Glassnode concluded.
