Bitcoin Struggles at $90,000 as Short-Term Holders Sell 3.4M BTC

Bitcoin (BTC) has been struggling to surpass the $90,000 resistance level, forming a series of lower highs and lower lows in the 1-hour time frame chart since reaching a weekly high of $88,752 on March 24. As the end of the week approaches, the failure to break above the $88,000 resistance has reduced the likelihood of a $90,000 retest before the end of Q1.

One of the primary reasons for Bitcoin’s current price struggles is the constant sell-side pressure from short-term holders (STHs) or investors holding coins for less than 155 days. The current Bitcoin cycle has witnessed a “top heavy” market where investors who purchased BTC at higher prices hold a significant portion of Bitcoin’s supply. As a result, the STH cohort have become the primary group facing the largest price drawdown since Bitcoin’s 30% correction from its all-time high. The volume of Short-Term Holder supply held in loss has surged to a massive 3.4M BTC, the largest volume of STH supply in loss since July 2018. This selling pressure is reflected in Bitcoin’s accumulation trend score, which has remained below 0.1 since BTC price dropped from $108,000 to the $93,000-$97,000 range. A score under 0.5 signals distribution (selling) instead of accumulation, and a sub-0.1 value highlights intense selling pressure.

Another factor contributing to Bitcoin’s struggle to break through the $90,000 threshold is the contraction of liquidity conditions. Data suggests that onchain transfer volumes have dropped to $5.2 billion daily, a steep 47% decline from the peak during the rally to all-time highs. Similarly, the active address count has also decreased by 18%, dropping from 950,000 in November 2024 to 780,000. This deleveraging and liquidity contraction, combined with only 2.5% of the total supply moving in profit during the correction, limits the market’s capacity to rally past $90k since there are insufficient buy orders to absorb sell orders.

New demand for Bitcoin continues to fall, with the Cost Basis Distribution (CBD) Heatmap showing supply concentration at higher price levels ($100K-$108K) but no significant influx of buyers at lower levels to drive a price recovery. The lack of demand factor is compounded by macroeconomic uncertainty, which has discouraged new investors, as seen in the transition to net capital outflows when the 1-week to 1-month STH cost basis fell below the 1-month to 3-month cost basis. However, the Long-Term Holder cohort still retains a substantial portion of the network wealth, holding almost 40% of invested value. Essentially, these periods of prolonged accumulation can eventually constrict the supply and lead to better conditions for a new wave of demand once a stronger uptrend is established in the market.