Bitcoin is testing a major long-term holder cost basis zone after pulling back from its recent move toward $87,000, while derivatives positioning has cooled significantly. Glassnode data show the largest concentration of long-term holder supply between $84,000 and $85,000, making the area a key point of attention as the market enters the fourth quarter.
The setup has changed further since the initial test. Bitcoin moved back above $85,000 on October 2 after sellers cleared much of the sell wall around that level, with the cryptocurrency trading near $86,700 at the time of The Block’s report.
KEY TAKEAWAYS
- Glassnode identifies $84,000 to $85,000 as Bitcoin’s largest long-term holder supply cluster.
- Coin-denominated open interest has fallen to its lowest level since March and is nearly 20% below its August level.
- Bitfinex analysts said much of the leverage accumulated during Bitcoin’s move toward $87,000 has been cleared, leaving perpetual positioning near neutral.
- Bitcoin later broke above $85,000, with Glassnode identifying the next significant sell orders around $87,000.
- Softer August PCE data reduced expectations for another Federal Reserve rate increase in October, although elevated Treasury yields remain a market headwind.
BITCOIN CONFRONTS CONCENTRATED HOLDER SUPPLY
Bitcoin’s retreat from last week’s high brought it back toward a price range where a large amount of long-term holder supply is concentrated. Glassnode previously identified the broader $81,000 to $86,000 range as an important supply area. Its latest data narrowed the most concentrated band to $84,000 to $85,000. Bitcoin was trading near $84,000 when the analysis was published on September 29, following a move to roughly $87,000.
Capital.com analyst Daniela Hathorn also identified $84,000 to $85,000 as an important area during a pullback, while $87,000 to $88,000 represented a nearby resistance zone. JPMorgan separately referenced approximately $85,000 as an estimated Bitcoin production cost, a level that could reduce pressure on miners if prices remain above it.
The market subsequently pushed through the $85,000 area. Glassnode said sellers had partially filled orders around $85,000 before removing the remaining tasks, leaving the next notable group of sell orders near $87,000.
DERIVATIVES LEVERAGE HAS FALLEN SHARPLY
The price action has been accompanied by a substantial reduction in derivatives exposure. Glassnode reported that Bitcoin’s coin-denominated open interest had dropped to its lowest level since March and was almost 20% below its August level. Bitcoin, meanwhile, remained roughly 35% above its August low of about $62,000.
Bitfinex analysts said much of the leverage accumulated during the rally toward $87,000 had been cleared, with perpetual futures positioning moving close to neutral. This distinction matters because open interest measures active derivatives contracts rather than direct spot demand. A decline in open interest therefore shows that leveraged positions have been reduced, but it does not by itself establish whether traders have turned bullish or bearish.
Bitfinex described the next phase as dependent more heavily on spot demand. Its earlier base case called for Bitcoin to trade within a range between the $84,000 long-term holder cluster and the $87,722 yearly open through the end of September.
MACRO CONDITIONS PROVIDE A MIXED BACKDROP
Economic data have since offered some relief. August headline PCE inflation increased 0.3% month over month and 3.4% annually, while core PCE rose 0.2% monthly and 3% from a year earlier. The softer core reading reduced expectations for another Federal Reserve rate hike in October.
However, Treasury yields remain elevated, keeping pressure on risk assets. Analysts cited by The Block have continued to point to higher yields as a constraint on Bitcoin, while crude oil prices have also added pressure to non-yielding assets. Institutional demand has also shown mixed signals. U.S. spot Bitcoin ETFs ended a nine-day inflow streak worth approximately $3.1 billion on September 30, recording $148.7 million in combined net outflows.
CONCLUSION
Bitcoin’s test of the $84,000 to $85,000 long-term holder supply cluster came alongside a major reduction in derivatives leverage, leaving the market less dependent on crowded futures positioning than during the move toward $87,000.
The subsequent move above $85,000 has shifted immediate attention toward the $87,000 area, where Glassnode identified the next concentration of sell orders. At the same time, mixed ETF flows, elevated yields and changing expectations for Federal Reserve policy remain important factors for spot demand.
The combination of concentrated holder supply and reduced leverage gives Bitcoin a clearly defined market structure to watch as the fourth quarter begins.
