On-chain analytics firm Glassnode has pointed out in a new report how Bitcoin is facing supply overhang beyond the $98,000 region.

In its latest weekly report, Glassnode has discussed about how the recent Bitcoin rally stalled near the Realized Price of the short-term holders (STHs). The “Realized Price” is an on-chain metric that tracks the cost basis of the average investor or address on the BTC network.

The STH Realized specifically measures the average acquisition level of traders who purchased within the past 155 days. As the below chart shows, this indicator is located at $98,400 right now.

This level is around where the recent recovery run hit an obstacle, potentially due to selling from underwater recent buyers who used the rally to exit near their break-even mark.

Glassnode explained:

The recent rejection near the Short-Term Holder cost basis at ~$98.4k mirrors the market structure observed in Q1 2022, where repeated failures to reclaim recent buyers’ cost basis prolonged consolidation.

The STH Realized Price provides a look at the average break-even level of a broad section of the market. For a more granular look, another indicator called the UTXO Realized Price Distribution (URPD) exists.

From the chart of the Bitcoin URPD, it’s visible that a notable amount of the STH supply has a cost basis between the current level and $98,000 (colored in blue). This supply represents the tokens that were redistributed by top buyers into newer market participants during the price rally.

Not all top buyers sold, however, as it’s apparent in the graph that at levels around and above $100,000, the long-term holder (LTH) supply is becoming a notable force (shaded in red).

Coins count under the LTH cohort once they mature past the 155-day age bracket. The fact that LTH supply is building up at these levels suggests some bull market entrants are willing to hold.

The analytics firm noted:

This unresolved supply overhang remains a persistent source of sell pressure, likely to cap attempts above the $98.4k STH cost basis and the $100k level. A clean breakout would therefore require a meaningful and sustained acceleration in demand momentum.

It now remains to be seen how Bitcoin’s upcoming price action would look, particularly in the context that major supply clusters are still sitting underwater.

Bitcoin has been following a downward trajectory since its rejection from the STH Realized Price as its value is now trading around $89,100.

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