Bitcoin’s Recent Surge: A Closer Look at the On-Chain Data
Bitcoin (BTC) has reclaimed the $90,000 mark, but a closer examination of on-chain data reveals that this move may be built on shaky ground. Despite a strong cost-basis cluster, demand, liquidity, and futures activity remain thin, raising concerns about the sustainability of this upward trend.
A key factor to consider is the $84,000 cost-basis cluster, which holds over 400,000 BTC. However, spot demand above this level remains shallow, with order books thin and prices moving through areas with minimal buyer engagement. For Bitcoin to maintain its position above $90,000, it’s essential to see a shift from passive historical accumulation to active, ongoing demand.
Spot Demand and Cost Basis
The Bitcoin cost-basis distribution heatmap, provided by Glassnode, illustrates the dense cost-basis cluster around $84,000. This cluster represents a significant “floor” for the cryptocurrency, with over 400,000 BTC acquired in this range. However, the lack of spot participation above this level is a concern, and the market needs to see more spot absorption between $84,000 and $90,000 to establish a healthier bullish structure.
Bitcoin Cost Basis Distribution heatmap. Source: Glassnode
Liquidity and Short-Term Holder Confidence
Glassnode notes that Bitcoin continues to trade below the short-term holder (STH) cost basis of $104,600, placing the market in a low-liquidity zone similar to the post-ATH fade in Q1 2022. The $81,000–$89,000 compression, combined with realized losses averaging $403 million/day, suggests that investors are exiting rather than buying into the strength. The STH Profit/Loss Ratio’s collapse to 0.07x reinforces that demand momentum has evaporated.
Profit/Loss ratio of STH. Source: Glassnode
Futures Markets and Open Interest
The breakout to $91,000 has been fueled mainly by shorts covering, rather than fresh long exposure. Open interest continues to decline, cumulative volume delta is flat, and shorts liquidation pockets drove the move through $84,000, $86,000, and $90,000. Funding rates hovering near neutral reflect a cautious derivatives environment, with leverage bleeding out in an orderly fashion but buyers not stepping in with conviction.
Bitcoin’s price, open interest, and cumulative volume delta. Source: Hyblock Capital
To establish a supportive trend shift, it’s essential to see rebuilding open interest on the long side, along with sustained positive funding driven by actual demand, rather than forced short exits. As the market navigates this critical juncture, it’s crucial to monitor on-chain data and market sentiment to gauge the sustainability of Bitcoin’s recent surge.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
