Bitcoin’s on-chain structure continues to show signs of weakness, indicating that a lasting consolidation phase may be in store for its price, according to an assessment from Glassnode.

Key Insights:

• Bitcoin is currently sandwiched between significant cost-basis levels, with expectations of a consolidation phase similar to that of 2022 if essential support isn’t regained.
• Spot Bitcoin ETFs have reported outflows totaling $708.7 million, marking their fifth largest exit since inception, which reflects cautious sentiment among institutional investors.

Ongoing Supply Constraints

In Glassnode’s recent newsletter, it highlighted major resistance zones that are limiting upward movement and affecting rally sustainability. The BTC/USD trading pair has been fluctuating in a broad range, constrained by an average price of $81,100 and a short-term holder cost-basis of $98,400.

“This similarity reinforces the fragility of the current recovery attempt.”

The provided chart demonstrates how Bitcoin’s price remained within a specific range during early 2022 before entering a bear market, bottoming around $15,000 later that year.

Continuing to monitor the Bitcoin risk index, which presently stands at 21 and is just below the high-risk zone, suggests a necessary increase in buyer demand to break the current market constraints. Analyst insights:

“A clean breakout would therefore require a meaningful and sustained acceleration in demand momentum.”

Ethereum ETFs Demonstrate Similar Trends

Simultaneously, Ethereum ETFs are experiencing net outflows, further underscoring current market caution.

In conclusion, if Bitcoin can’t successfully navigate past resistance at $98,000-$100,000, the potential for a bullish market cycle seems unlikely.