Bitcoin’s post-squeeze rebound has lost momentum below a heavy supply zone, with rising sovereign yields and softer ETF turnover pointing back to a defined trading range, according to Glassnode.
In its latest weekly report, the on-chain analytics firm said the burst of enthusiasm that followed the mid-August short squeeze faded quickly. Spot BTC pushed toward $80,000, then stalled below overhead long-term holder supply as the broader macro backdrop tightened again.
Rally rejected below the upper liquidation band
Glassnode said its prior weekly note had already flagged that the Aug. 19 short squeeze cleared out a large amount of leverage while sending price into a dense overhead structure. That setup played out over the following week. On Aug. 27, Bitcoin climbed to $80,000, met persistent supply, then fell back toward $76,000 and triggered a chain of long liquidations.
Futures liquidation heatmaps show BTC pinned between two clear zones. The upward impulse wiped out shorts along the way, but it did not reach the denser short liquidation cluster between $83,000 and $86,000. Below spot, the long liquidation fuel between $60,000 and $63,000 remains intact. Price is now sitting between those two boundaries.
More supply is in profit at the same price area
Glassnode said a quieter source of friction sits in the network-wide profit structure. When Bitcoin traded near $78,000 in May, roughly 65% of supply was in unrealized profit. By late August, when spot returned to a similar level, that share had risen to 68%.
The change reflects summer accumulation. The short-term holder cost basis has been reset to around $71,000. In nominal terms, the market is revisiting a similar price, but a larger share of coins is now sitting in profit. That leaves thicker potential sell-side liquidity if spot tries to retest prior highs.
Overlaying the on-chain cost basis model with supply distribution produces a clear range map. On the downside, summer consolidation built a firm accumulation floor between $62,000 and $65,000. On the upside, long-term holders accumulated large positions between $83,000 and $86,000. Glassnode said spot remains trapped between those two zones.
ETF inflows continued, but secondary trading stayed muted
Institutional access remained supportive on the surface. U.S. spot Bitcoin ETFs kept pulling in capital during the rebound, with the 7-day average of net inflows rising to $290 million per day. Secondary activity, though, was far quieter. Daily ETF trading volume stayed around $3 billion, well below levels seen during earlier expansion phases.
Glassnode said inflows driven by a single policy headline, without broader market participation and speed, tend to look more like a local impulse than a durable leg higher. Once the catalyst fades, prices often give back part of the move.
10-year Treasury yield climbed back to 4.8%
The macro backdrop turned restrictive again. Glassnode said a Treasury buyback headline on Aug. 19 briefly pushed the U.S. 10-year Treasury yield down toward 4.6%, but the move reversed fast. Within eight trading days, the yield had returned to 4.8% and printed a new high for the cycle.
That quick reversal, the report said, shows sovereign debt pressure is still the main driver of the global discount rate.
Early in the rebound, Bitcoin briefly decoupled from major equity indexes while U.S. stocks moved sideways. On a rolling 30-trading-day basis, BTC’s correlation with the S&P 500 slipped toward zero. Glassnode said sudden decoupling during sovereign bond selloffs has historically been short-lived and tends to signal local exhaustion rather than a structural shift.
Options cooled after the squeeze, with Sept. 25 expiry in focus
The options market captured a sharp turn in sentiment over the past two weeks. The 7-day 25-delta skew jumped during the squeeze as traders chased upside calls. After resistance held, the metric mean-reverted quickly and moved back toward neutral.
By contrast, the 180-day skew stayed stable throughout the period, suggesting that short-term enthusiasm cooled while the broader structure of long-dated options demand remained in place.
Further out the curve, positioning is being shaped by the Sept. 25 quarter-end expiry. Open interest across Deribit and IBIT totals about $14 billion, with a large share concentrated at strikes above $80,000. Glassnode said that approaching quarter-end event is likely to act as an important anchor for volatility and positioning in the coming weeks.
Range remains intact
Glassnode’s conclusion is that the repair rally after the short squeeze stopped below the $83,000 to $86,000 supply band. At a similar spot price, a larger share of the network is now in profit, sovereign yields have reset to cycle highs, and options sentiment has already cooled back toward neutral.
Until the market absorbs that overhead supply, Bitcoin remains boxed in. The $62,000 to $65,000 structure built below spot remains the main downside reference.