Bitcoin price is back in the low $80,000s, but heavy supply near $86,900 could slow the recovery unless fresh capital keeps coming in.
The Bitcoin price is back to the low $80,000 range but with a significant supply level of $86,900 that may hinder the price recovery except for fresh capital inflows into the crypto market.
Glassnode, the blockchain analytics firm, said in a May 13 report titled that ETF inflows, spot demand and trader positioning have improved. Still, it warned that “weaker capital inflows and heavy overhead supply near $86K keep conviction below prior bull phases.”
Therefore, they say, Bitcoin’s recovery has moved market sentiment “from fear toward uncertainty rather than capitulation.” The Relative Unrealized Loss indicator for the cryptocurrency hit a high point of 25% during its decline in February but then dropped to around 8% once Bitcoin was again trading above $80,000.
Now, Glassnode says that if $60,000 was the cycle low, as some in the industry have suggested, the drawdown would be “the shallowest on record.”
Read also: Bull-Bear Signal, Bitcoin ETF Inflows, Institutional Buys: What’s Driving BTC Price in May
Bitcoin Faces $87K Test
However, the key concern lies in capital flows because, according to Glassnode, the net realized cap position change in Bitcoin, which indicates the influx of new capital onto the network, has been restored to $2.8 billion per month.
This is good news, but it’s not quite enough to resemble previous bull phases. The analysts note that this particular measure tends to rise from around $2 billion to $10 billion per month during significant market rallies between 2023 and 2025, emphasizing that the current reading “lacks the conviction seen at comparable inflection points.”
According to Glassnode, the nearest support lies around the $76,900 level, being the 30-day cost basis for those coins bought recently. Resistance lies above the current spot level, around the $86,900 level, when investors who purchased BTC▼$63,201.00 between November and February reach breakeven.
So far, Glassnode said, the rally looks like “a structurally supported recovery” rather than “a fully confirmed momentum breakout,” with conviction still rebuilding, not fully returned.
Read more: Bitcoin Price Could Reach $160K If BTC Catches Up to Stocks, VanEck Analyst Says
