1. Bitcoin shows early signs of stabilization between $100K and $106K, with momentum improving.
2. On-chain activity and stablecoin liquidity suggest potential for renewed accumulation.
3. Derivatives are cautious but stabilizing, while short-term holders remain under stress.

Bitcoin has rebounded sharply from $100,000 to $106,000, signaling an easing of selling pressure after October’s steep decline. Data from Glassnode indicates that price action is forming a potential bottoming structure, with momentum gradually recovering from oversold conditions.

The Relative Strength Index (RSI), which had dipped below 30, is showing a rebound, suggesting that aggressive selling may be subsiding. Spot trading remains high near recent levels, pointing to sustained market participation and the potential for volatility expansion if Bitcoin surpasses short-term resistance in the $111K–$116K range.

Open interest in derivatives has contracted modestly, reflecting reduced leverage and lower speculative exposure. Options markets remain defensive, with elevated skew as traders hedge downside risk.

ETF flows are negative but steady, indicating measured profit-taking rather than mass exits. Together, these trends point to a cautious yet stabilizing environment, with Bitcoin testing a critical inflection zone that could serve as a mid-term support range between $100K and $108K.

On-Chain Activity Shows Signs of Recovery

Network activity has shown signs of revamping weeks ago, with more normalized use and capital movement. The transfer amount is above statistical average values, with average activity and fees indicating use.

This action, though indicating unprofitability and stress among the short-term holders, often precedes accumulation due to the acquisition of supply triggered by those who are exiting on the losing side.

Data from CryptoQuant shows that the stablecoin supply has increased relative to the Bitcoin market cap. The Stablecoin Supply Ratio (SSR) has again moved to the historic low zone of 13 that was seen before the significant rallies in mid-2021 and in 2024.

Binance’s Bitcoin/Stablecoin Reserve Ratio follows the same pattern, with an increase in stablecoin reserves and declining holdings of BTC. Historically speaking, such circumstances tend to be seen during the time of seller’s exhaustion and structural capitulation phases, indicating possible buying power present in the market.

Bitcoin Faces Cautious Macro Environment

Although it is true that there are current surroundings that are becoming more stable, one still has to consider that Bitcoin is still operating within a cautious macro environment. The pressure that short-term holders are facing has been driven by the reality that there are still low levels of realized gains.

Observers in the market indicate that failing below the $100K level of support may lead to further revaluing, while holding such levels can signal the beginning of the quiet accumulation process.

Experts indicate that such periods may be dull in terms of activity but represent key milestones during which deep portfolios are formed before the onset of the subsequent market cycle.

Also Read: Crypto Market Correlation With S&P 500 Breaks as Bitcoin Falls Under $100,000