Bitcoin's $85,500 Breakout Fades Amid High Yields and Long-Term Holder Resistance
Bitcoin's brief surge above $85,500 was cut short as investors' hopes for lower interest rates were quickly dashed. The Federal Reserve's decision to keep tightening monetary policy is weighing on the cryptocurrency's price.
The breakout at $85,000 was aided by forced buying, with crypto liquidations reaching $1.06 billion over 24 hours in early September, including $844 million of short positions. However, this source of momentum has since dwindled, with coin-denominated open interest falling almost 20% from August levels and reaching its lowest since March.
The resistance around $85,000 is not just technical; it's also due to the concentration of long-term holder supply in this price range. Glassnode has identified $84,000 to $85,000 as Bitcoin's largest long-term-holder cost-basis cluster, meaning more long-term holders are selling near breakeven or taking profits, forcing new buyers to absorb additional supply.
US spot Bitcoin ETFs have attracted roughly $3.1 billion in inflows over nine trading sessions, but this influx of institutional money is not enough to overcome the existing holder supply. Analysts at Bitfinex say that spot demand will likely determine how the range resolves, rather than prevailing financial conditions.