Bitcoin has risen more than 12% since last week’s sharp drop to a low of $80,000, offering the market a brief moment of relief after an intense period of capitulation. Despite this recovery, fear and uncertainty continue to dominate sentiment, especially after what analysts describe as the largest short-term capitulation of holders in Bitcoin history.
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This wave of realized losses – rapid, aggressive and record-breaking – has left many investors wondering whether the recent recovery is sustainable or just a temporary rebound in a broader downtrend.
According to new data from Glassnode, the path ahead remains challenging. Analysts explain that Bitcoin must break above the large supply clusters created by top buyers earlier in the cycle if it is to regain meaningful upside momentum.
These clusters represent areas where a large number of investors previously bought at higher prices and may now be looking to exit at breakeven, increasing the likelihood of heavy selling pressure as BTC rises.
Bitcoin faces critical supply barriers
Glass junction reports that Bitcoin is now approaching two major supply clusters that will play a decisive role in determining whether the recent recovery can evolve into a sustainable recovery. The first cluster is between $93,000 and $96,000, while the second – much larger and structurally more important – covers $100,000 to $108,000.
These zones were created earlier in the cycle by heavy buying activity and represent areas where many investors are currently underwater or close to break-even.
Therefore, Glassnode notes that these margins typically act as strong resistance, as recent buyers who have weathered the latest decline may choose to sell once the price returns to their entry level. These dynamics can create temporary supply walls, slowing momentum even at times of aggressive recovery.
Bitcoin’s ability to break these clusters will determine whether it can recover its path to an all-time high or remain under heavy distribution pressure. The market is now entering a critical phase, with traders keeping a close eye on how BTC behaves as it approaches these levels. A clean breakout would be a sign of renewed confidence, while a rejection could indicate that the broader corrective structure is not yet over.
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Testing support after a multi-week sharp sale
Bitcoin’s weekly chart shows a market trying to stabilize after one of the most aggressive declines of the cycle. BTC has recovered to the $91,500 area after a deep drop to the $80,000 area last week, indicating that buyers are finally providing important support. This recovery coincides with a strong weekly candle that shows a long lower shadow, a classic sign of demand absorption during a heavy sell-off.
However, despite this revival, the broader structure remains vulnerable. The price is trading below the 50-week moving average, a level that previously acted as reliable support during the bull phase. The loss of this dynamic support earlier this month was a major technical break, and BTC is now trying to regain it from below – usually a challenging move that often acts as resistance.
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The 100-week moving average around the mid-$80,000s has proven crucial, halting the decline and being the main area where buyers defended the trend. As long as BTC remains above this zone, the broader market avoids confirmation of a deeper macro reversal.
Volume remains high, reflecting capitulation level activity, and the market is now in a decisive phase. A sustained close above $92,000 – $94,000 would strengthen recovery prospects, while rejection would risk retesting the $80,000 support.
Featured image of ChatGPT, chart from TradingView.com