MarketsBitcoin
|7 min ReadBitcoin Tests 2022-Style Fragility Above 96K
Maya Chen
Senior Analyst
Published
Jan 16, 2026
Bitcoin is not in freefall, but it is not healthy either. Price has stabilized just above the True Market Mean, the cost basis of actively circulating coins, which historically separates shallow corrections from full bear phases. Under the surface, though, market structure is starting to rhyme with Q1 2022, when supply in loss swelled, demand thinned and every macro headline hit harder than it should.
More than one quarter of the circulating supply now sits underwater as spot trades near the lower band of the 0.75 quantile around 96.1K. That means a large cohort of top buyers are sitting on paper losses, a fragile setup where any macro shock can push them from patience to capitulation. To rebuild a solid structure, the market needs to reclaim the 0.85 quantile near 106K and start using it as support, not resistance.
On-Chain Pain With Just Enough Capital To Hold The Line
The loss profile is brutal. Total supply in loss has climbed back into the 5 to 7 million BTC band, levels last seen in early 2022. That tells you two years of bull market expansion are now colliding with two short, incomplete bottom formation phases. For traders, it feels like the market has done a full round trip in sentiment without ever flushing properly.
The difference versus 2022 is capital momentum. Net change in realized cap is still positive at roughly 8.7 billion dollars per month, far below the tremendous 64.3 billion peak of July 2025 but clearly above zero. That means fresh money is still quietly entering, absorbing some profit taking from older wallets and helping the True Market Mean act as a consolidation zone instead of collapsing on first contact.
Long term holders are still spending into profit, but the margin is shrinking. Their spent output profit ratio sits around 1.43 on a 30 day basis, down sharply with price. This looks very similar to early 2022, when long term investors were trimming into strength but no longer enjoying outsized gains on each sale. Demand is working, yet liquidity is thinner, so staying above the True Market Mean is crucial until a new wave of buyers steps in with size.
Spot And Futures Demand Are Thinning Out
Off chain, the big incremental buyer of 2025 has turned neutral to negative. US spot BTC ETFs now show persistently negative three day net flows, a sharp reversal from the steady inflows that helped absorb miner and whale distribution earlier in the year. Outflows are broad across issuers, which signals a genuine cooling of institutional appetite rather than a single product rotation.
Spot order books are telling the same story. Cumulative Volume Delta has rolled over on major venues, with Binance and the aggregated exchange cohort showing persistent net selling pressure. More traders are crossing the spread to hit bids than to lift offers. Even Coinbase, often a proxy for US bid strength, has flattened out instead of leading a new accumulation phase. Price is now resting on a thinner demand base, more exposed to continuation moves if macro turns against risk.
Futures confirm the risk off tone. Open interest has been bleeding lower through late November, unwinding much of the speculative leverage built during the prior uptrend. There is no aggressive shorting spree, just a steady reduction in exposure that leaves the market with less embedded leverage and fewer candidates for forced liquidations in either direction.
Perpetual funding rates have reset toward neutral, oscillating around zero instead of sitting in rich positive territory. That tells you crowded longs have largely been cleaned up. Modest dips into negative funding have been shallow and short lived, showing that traders are not eager to lean heavily short even as spot grinds lower. Structurally, that is healthier, but it also means you cannot rely on squeeze mechanics alone to drive a sharp reversal.
Options Say Calm Surface, Big Moves Still In Play
The options market is where the signal gets interesting. Implied volatility across the curve has compressed after last week’s spike. Short dated contracts dropped from the high 50s to the high 40s, mid tenors slipped to the mid 40s and longer expiries are now in the high 40s. On paper, that looks like traders are pricing a calmer near term environment and stepping back from panic hedging.
Skew has softened too. Short tenor 25 delta skew fell from a peak near 19 percent during the drop toward 84.5K to around 8 percent on the rebound. That shift suggests the initial fear about spillovers from Japanese bond and carry trade stress was exaggerated. Longer maturities adjusted more slowly, which fits a market happy to chase short term relief but still unconvinced about the durability of any rally.
Flow data show the same flip. Early in the stress, put buying dominated as traders tried to insure against a repeat of August 2024. Once spot stabilized, call activity picked up and nearly mirrored the previous pattern, but with a twist. Dealers remain long gamma into the large December 26 expiry, which tends to keep price action contained inside ranges while they hedge.
At the 100K strike, call premium sold still exceeds premium bought and that gap has widened during the latest bounce. Traders are happy to sell upside against that psychological level rather than pay up for a breakout into the FOMC meeting. The structure around 100K looks more like a ceiling to fade than a target to front run.
Crucially, implied volatility now sits below realised volatility. Options are pricing smaller moves than the market has actually delivered over recent sessions. That creates a negative volatility risk premium and a favourable backdrop for being long gamma, since each swing can be monetized when realised moves outpace what was implied.
For directional traders, the message is clear. Bitcoin is in a fragile equilibrium that will hold as long as price stays inside the roughly 96K to 106K cost basis band and the True Market Mean continues to act as a magnet rather than a trapdoor. A clean reclaim of the upper quantile with improving ETF and spot demand would argue for a constructive 2026 setup. A breakdown from this zone, especially if paired with a negative macro surprise, would turn these echoes of early 2022 into something much more serious.
Origin Source: https://insights.glassnode.com/the-week-onchain-week-48-2025/
Disclaimer: This document is intended for informational and entertainment purposes only. The views expressed in this document are not, and should not be taken as, investment advice or recommendations. Recipients should do their own due diligence, taking into account their specific financial circumstances, investment objectives and risk tolerance, which are not considered here, before investing. This document is not an offer, or the solicitation of an offer, to buy or sell any of the assets mentioned.