According to Woofun AI, Bitcoin (BTC) is encountering substantial supply resistance near the $85,000 mark, driven primarily by the fact that a large number of long-term holders are sitting on unrealized losses.
On October 29, BTC prices hovered around $81,400, pressured by the Federal Reserve's decision to hold off on adjusting interest rates.
Glassnode on-chain data shows that long-term investors who have held their positions for more than 155 days accumulated roughly 4 million BTC in the $85,000 to $118,000 range, with the notional value of these holdings approaching $326 billion.
More critically, over 50% of these long-term positions now have a market value below their original acquisition cost, creating a massive reservoir of potential selling pressure.
This structural obstacle on the supply side has allowed the $84,000 to $85,000 price range to successfully cap Bitcoin's rallies four times this year.
From a market microstructure perspective, this price stagnation is no coincidence. Since January 2026, the BTC/USD pair has broken above $85,000 on only five trading days and has never sustained that level for three consecutive sessions.
This technical pattern aligns closely with the cost basis of U.S. spot Bitcoin ETFs (IBIT.US). Media reports indicate that the average cost for U.S. spot Bitcoin ETFs is approximately $81,500, while Bloomberg Intelligence analyst James Seyffart estimates the figure at around $82,000.
Data compiled by Woofun AI shows that as of the October 26 close, the unrealized losses on Bitcoin held by these ETFs totaled approximately $2.63 billion.
This institutional-level unrealized loss situation further amplifies the fragility of prices near key resistance levels, meaning any upward breakout would require absorbing an enormous volume of trapped positions.
Changes in the macroeconomic liquidity environment are also weighing on risk asset performance. On October 28, the Federal Reserve voted 10 to 2 to keep the benchmark rate in the 3.75% to 4.00% target range, with dissenting Federal Reserve Governors Lisa Cook and Cleveland Fed President Beth Hammack both advocating for a 25 basis point hike.
Futures markets had previously priced in a greater than 70% probability of further monetary tightening in December.
Tanm Sun, a senior researcher at HashKey, noted that persistently elevated U.S. Treasury bond yields are dampening investor appetite for risk assets. On Thursday of this week, the 10-year Treasury yield held around 5.00%, down from its annual high of 5.37% on October 7 but still at elevated levels.
Meanwhile, derivatives data shows that funding rates on BTC perpetual contracts have declined, compressing the profit margins for cash-and-carry arbitrage strategies.
A Galaxy Research (GLXY.US) report pointed out that due to narrowing spreads, nine banks and hedge funds reduced their spot ETF positions by an equivalent of 68,000 BTC. Although wealth management platforms and sovereign wealth funds recorded net inflows, overall sentiment remained cautious.
Capital flows and order book structure reveal subtle shifts in the market's bull-bear tug-of-war. From October 26 to 28, U.S. spot Bitcoin ETFs attracted a cumulative $424 million in net inflows, partially offsetting the $635 million outflow reported on October 22.
Tanm Sun warned that if BTC prices climb toward $85,000, investors seeking to close out positions could bring significant selling pressure.
However, market resilience has strengthened somewhat: at the August low point, daily realized losses exceeded gains by $630 million, whereas during the October 24 pullback, realized losses dropped to just $27 million.
Binance order book data shows that buy-side depth in the $78,000 to $79,000 range stands at $42 million, and Glassnode calculates the average cost for recent buyers at $75,800.
Looking ahead, the Federal Open Market Committee (FOMC) meeting scheduled for December 15-16, 2026, will become a key variable shaping the direction of financial markets.
Comments