Bitcoin has staged a strong recovery from its sharp October 2025 sell-off, but analysts warn that significant supply pressure around the $77,000 level could continue limiting upside momentum in the near term.
Although BTC recently climbed back above $82,000 earlier this month, the market quickly corrected toward $74,500 over the weekend, highlighting that selling pressure remains active despite the broader recovery trend.
Previous-Cycle Holders Continue Selling
According to Galaxy Digital’s head of research, Alex Thorn, many Bitcoin holders from previous market cycles are still selling into rallies.
Data analyzed by Thorn suggests that a large portion of the Bitcoin supply moving since the October 2025 market crash originated from wallets that previously accumulated BTC above the $103,000 level.
Following Bitcoin’s major correction from its all-time highs down to roughly $60,200, many long-term holders appear to have either capitulated during the decline or taken profits as the market recovered.
Thorn estimates that approximately 4.45 million BTC may have changed hands over the past seven months alone.
Importantly, about half of the recently activated supply reportedly came from addresses that last moved coins when Bitcoin traded at $103,600 or higher.
This creates a major supply overhang because many investors who bought near the top may continue selling during recoveries to reduce losses or exit positions.
Large Amount Of Older Bitcoin Also Entered The Market
The analysis also revealed that around 36% of the Bitcoin supply moving since October came from holders with cost bases below $66,000.
This includes roughly 237,000 BTC that had remained dormant since before the collapse of FTX in November 2022.
According to Thorn, this indicates that a substantial amount of older Bitcoin holdings have recently re-entered circulation either for profit-taking or defensive selling during market uncertainty.
As a result, Bitcoin now faces the challenge of absorbing large amounts of supply near current price levels.
Thorn believes this heavy supply concentration around $77,000 could continue making sustained breakouts more difficult until the market fully absorbs the selling pressure.
ETF Outflows Add To Market Weakness
Spot Bitcoin ETF activity may also be contributing to the recent weakness.
Thorn noted that BlackRock’s iShares Bitcoin Trust ETF (IBIT) recently experienced a massive $1.29 billion block trade, one of the largest seen so far.
The move may indicate that some institutional investors are reducing exposure while Bitcoin remains significantly below its all-time highs.
Large ETF outflows can increase short-term selling pressure because fund managers may need to liquidate underlying Bitcoin holdings as investors exit positions.
Market Recovery Still Remains Intact
Despite the recent pullback, some analysts argue that traders are focusing too heavily on short-term corrections while ignoring Bitcoin’s broader recovery trend.
Crypto analyst GordonGekko pointed out that Bitcoin has still gained roughly 37% from its February lows near $60,200.
According to this view, recent profit-taking may simply represent a normal market cooling period rather than the beginning of another major collapse.
The analyst also suggested that excessive bearish sentiment after the rejection near $82,000 could potentially create conditions for a future short squeeze if Bitcoin resumes upward momentum.
Macro Conditions Don’t Fully Explain Bitcoin Weakness
Interestingly, Bitcoin’s recent struggles come while traditional financial markets continue performing strongly.
The Nasdaq 100 recently reached new all-time highs, making it harder to blame Bitcoin’s weakness entirely on broader macroeconomic uncertainty.
Instead, analysts believe lingering supply pressure from previous-cycle holders and cautious institutional positioning may currently be the biggest obstacles preventing Bitcoin from reclaiming higher resistance levels near $85,000.
Until the market successfully absorbs this supply, Bitcoin may continue facing volatility and resistance despite signs of long-term recovery.
