Bitcoin’s rebound after the August short squeeze has faded below a key overhead supply zone, with rising Treasury yields and soft ETF turnover leaving the market back inside a well-defined range, according to Glassnode.
Rally runs into resistance after clearing leveraged shorts
Glassnode said the squeeze in mid-August flushed out a large amount of leverage and helped push spot Bitcoin toward $80,000. The move quickly ran into resistance. On Aug. 27, price broke above $80,000, met persistent supply, then fell back toward $76,000 and set off a string of long liquidations.
Futures liquidation heatmaps show price caught between two structural bands. The move higher took out short positions along the way, but it did not reach the dense short liquidation pocket between $83,000 and $86,000. On the downside, a pool of long liquidation fuel between $60,000 and $63,000 remains intact. For now, spot is trading between those two areas.
More supply is in profit at similar prices
Glassnode said one source of hidden friction sits in the network-wide profit profile. When Bitcoin traded near $78,000 in May, roughly 65% of supply was in unrealized profit. By the end of August, with spot back around the same area, that share had climbed to 68%.
The change reflects summer accumulation and a reset in short-term holder cost basis to around $71,000. At the same headline price, more coins are now sitting in profit, which means a retest of local highs could unlock thicker sell-side liquidity.
When Glassnode overlays on-chain cost models with supply distribution, the current range becomes clearer. Below spot, summer consolidation built a firm accumulation floor between $62,000 and $65,000. Above, long-term holders hold a heavy supply cluster between $83,000 and $86,000. Spot remains boxed in by those two zones.
ETF inflows continue, but secondary turnover stays muted
U.S. spot Bitcoin ETFs kept drawing capital during the rebound, with the 7-day average of net inflows rising to $290 million per day. Trading in the secondary market was quieter. Daily ETF turnover stayed near roughly $3 billion, well below levels seen in earlier expansion phases.
Glassnode said inflows driven by a single policy headline, without broader market participation and speed, tend to resemble a news-led impulse rather than sustained demand. Once the catalyst fades, price is more vulnerable to giving back gains.
10-year Treasury yield erases easing and returns to 4.8%
On the macro side, the report said a Treasury buyback headline on Aug. 19 briefly pushed the U.S. 10-year Treasury yield down near 4.6%. The move reversed quickly. Within the next eight trading days, the yield climbed back to 4.8% and marked a new high for the current cycle.
Glassnode said the speed of that reversal suggests sovereign debt pressure remains the main driver of global discount rates. Early in the rebound, Bitcoin briefly decoupled from traditional equity indexes while U.S. stocks moved sideways. On a rolling 30-trading-day basis, Bitcoin’s correlation with the S&P 500 slipped toward zero. Historically, the report said, sudden decoupling during sovereign bond selloffs tends to be short-lived and looks more like local exhaustion than a structural regime shift.
Options skew cools while quarter-end expiry becomes a focal point
The options market also captured the rapid shift in sentiment over the past two weeks. The 7-day 25-delta skew index jumped during the short squeeze as traders chased upside calls. After resistance held, the gauge quickly mean-reverted and moved back toward neutral.
The 180-day skew stayed broadly stable throughout the move, which Glassnode said suggests short-term enthusiasm has cooled while the longer-dated demand structure remains in place.
Farther out on the curve, the Sept. 25 quarter-end expiry is shaping the options landscape. Combined open interest across Deribit and IBIT stands at about $14 billion, with a large concentration of positions in strikes above $80,000. Glassnode said the approaching quarter-end expiry will act as an important anchor for volatility and positioning in the coming weeks.
Range remains intact
Glassnode’s conclusion was that the post-squeeze recovery rally stalled below the $83,000 to $86,000 supply band. With a larger share of supply now in profit at similar price levels, the U.S. 10-year yield back at a cycle high, and short-dated options sentiment normalized, the market remains constrained by the same range structure.
Until the overhead supply ceiling is absorbed, the $62,000 to $65,000 structural floor remains the main downside reference for Bitcoin.
