Bitcoin breaks major support as Glassnode cautions that selling pressure may intensify

Bitcoin is facing renewed downside pressure as long-term holders accelerate selling to the fastest pace seen since August, even as some analysts suggest the market may be nearing a cyclical bear-market bottom.

The latest leg lower comes amid a shift in macro dynamics following U.S. President Donald Trump’s unexpected nomination of former Federal Reserve governor Kevin Warsh as the next Fed chair. The announcement strengthened the U.S. dollar, reversed gains in precious metals, and helped push bitcoin through a key technical support zone.

Onchain metrics from Glassnode show bitcoin had been trading just above structural support near $83,400, the lower boundary of its short-term holder cost-basis model. A decisive break below that level raised the risk of a deeper decline toward $80,700, a level Glassnode refers to as the “True Market Mean.”

That downside scenario is now playing out. Over the past seven days, bitcoin has dropped more than 9.2% and is trading around $81,200. Weakness has spread across the broader digital-asset market, with the CoinDesk 20 (CD20) index falling 12.4% over the same period, pushing the Crypto Fear & Greed Index into “extreme fear.”

Despite the selloff, Glassnode noted that just 19.5% of short-term holder supply remained at a loss while BTC was above prior support — well below the roughly 55% level typically associated with full capitulation. The data suggests the market has not yet reached a point of widespread forced selling, though buyer conviction is increasingly strained as prices drift lower.

Derivatives markets echo the cautious tone. Funding rates remain subdued, signaling restrained speculative positioning, while options markets show growing demand for downside protection. Dealer gamma has turned negative below $90,000, increasing the risk of sharper volatility should additional support levels fail.

Overall, the data points to a market that is fragile but not yet fully broken, with liquidity conditions likely to determine whether losses deepen or stabilize.

At the same time, extreme pessimism across crypto communities may be offering a contrarian signal. According to analytics firm Santiment, sentiment across major cryptocurrency platforms has plunged to levels that have historically preceded price recoveries.

In a recent report, Santiment described the surge in bearish social-media commentary as one of the few constructive indicators in an otherwise gloomy environment. “While network fundamentals are stagnant, crowd sentiment has hit extreme negativity levels,” the firm wrote, noting that such conditions have often coincided with local market bottoms.

Prices have trended lower over recent months as long-term holders step up selling, a move that has coincided with a reversal in the U.S. dollar’s earlier decline. Even so, some industry observers believe the current wave of fear may prove temporary.

Bitwise CIO Matt Hougan recently said on CoinDesk’s Markets Outlook that crypto appears to be in the later stages of forming a bear-market bottom, pointing out that historically, digital-asset markets have often moved in the opposite direction of prevailing crowd sentiment.