Cwallet Weekly Crypto Express | Bitcoin Struggles to Break $98K: What's Next for Crypto?

Executive Summary (Week 03, 2026)

• Bitcoin attempted a relief rally but failed to sustain gains above the short-term holder cost basis, indicating a fragile breakout.
• Supply overhang persists as selling pressure from breakeven sellers caps upside momentum.
• Spot market flows have improved modestly with some buy-dominant dynamics emerging.
• Derivatives participation remains subdued, reflecting low engagement and sensitivity to liquidity shocks.

Failed Breakout Into Resistance

Bitcoin's recovery attempt in early January faced repeated resistance near the short-term holder (STH) cost basis (~$98.4K). While buyers initially pushed price toward this important threshold, the move was ultimately rejected, reinforcing a fragile market structure.

In this market regime, the range between the True Market Mean (~$81.1K) and the STH cost basis defined a broad consolidation band. After signs of seller exhaustion opened the door for a rebound earlier in the year, price action pushed into resistance but stalled beneath levels where significant breakeven supply from recent buyers remains prevalent.

This pattern echoes previous consolidation phases in prior cycles, where multiple failed breakouts prolonged sideways price movement. Such behavior suggests structural fragility, as upward moves confront entrenched sell-side pressure from investors who accumulated during higher price regimes.

As market participants absorb this resistance band, Bitcoin’s price continues to be constrained by sell pressure, highlighting that a breakthrough above these cost basis levels requires sustained demand rather than transient pushes.

Persistent Supply Overhang and Seller Dynamics

A deeper examination of on-chain supply distribution reveals why upside attempts continue to stall. Across the supply spectrum above current spot levels, there is a wide and dense cluster of long-term holder (LTH) and STH positionsthat may act as latent sources of sell-side liquidity. Recent rallies filled some prior gaps between ~$93K and ~$98K, but above this band, unresolved overhead supply remains a dominant force.

This supply overhang has matured into a substantial pool of potential selling pressure that is likely limiting upside progress. Unless fresh demand emerges with significant conviction, rallies might continue to be vulnerable to distribution as sellers look to exit nearer to their breakeven ranges.

Moreover, on-chain metrics show a pattern of realized losses concentrated in the 3–6 month cohort, indicative of holders who bought closer to recent highs now exiting as price revisits entry levels. This behavior reinforces near-term sell pressure and reduces the probability of a clean breakout absent a meaningful shift in demand dynamics.

Spot Market and Off-Chain Insights

While on-chain supply dynamics highlight persistent overhead resistance, spot market participation has shown modest improvement. Exchange cumulative volume delta (CVD) measures have rotated back toward a buy-dominant regime, suggesting that some spot participants are absorbing supply rather than contributing to distribution.

Notably, selling pressure from previously aggressive venues has slowed, helping to stabilize short-term price behavioras Bitcoin retests critical levels. However, this constructive improvement has not yet evolved into the type of broad-based, sustained accumulation typically associated with durable trend expansion, leaving the market in a neutral to cautious state.

orporate treasury flows similarly remain sporadic and uneven, with occasional inflows offset by extended periods of inactivity. This uneven participation further underscores the absence of a cohesive accumulation regime at higher macro price levels.

Derivatives: Low Participation and Liquidity Sensitivity

The derivatives landscape continues to reflect a low-engagement market regime. Bitcoin futures trading volume has contracted and remains muted compared to levels typically seen in strong trend phases.

Open interest adjustments have occurred without corresponding increases in traded volume, suggesting that recent price movements are driven more by thin liquidity and repositioning rather than fresh directional conviction. This situation leaves price discovery highly sensitive to localized shifts in participation.

Options markets show that implied volatility has reacted primarily at the front end of the curve, with short-dated implied volatility rising while longer-dated tenors remain anchored. This pattern indicates tactical responses to short-term uncertainty rather than fundamental risk repricing across broader time frames.

What This Means for Crypto Users

For most Cwallet users, this week's market remains nuanced, with a combination of ongoing resistance and cautious participation by both spot and derivatives markets. Here's how to interpret the current landscape:

• Market Direction Remains Indeterminate: Bitcoin's failure to sustain gains above key cost basis levels suggests that the path forward remains unclear. As price action oscillates within a range and supply overhang persists, a wait-for-confirmation approach can help avoid premature decisions during uncertain market phases.
• Risk Management and Flexibility: In periods of consolidation and fragile breakouts, emphasizing risk awareness becomes especially important. Tools such as spot position adjustments, asset swaps, or maintaining more liquid exposures can help users adapt without overcommitting to a particular directional bias.
• Observe Key Levels and On-Chain Signals: Watching how price reacts to supply clusters, as well as shifts in spot flows and volatility dynamics, can enhance understanding of underlying market sentiment.

Avoiding emotional responses to short-term price fluctuations and identifying structural changes over time may help inform clearer decisions.By focusing on broader market context, Cwallet users can maintain a clear perspective and position themselves to respond as market catalysts unfold.

Conclusion

Bitcoin's recent attempt to break beyond key cost basis levels has underscored the market’s fragile structure and persistent supply overhang. Repeated breakouts have been met with distribution, reinforcing short-term resistance and limiting sustained upside.

Although spot flows have shown signs of improvement, the broader market remains in a state of cautious participation, with derivatives engagement subdued and implied volatility primarily reacting at the front end of the curve.

For Cwallet users, navigating this environment calls for emphasis on risk awareness, flexibility, and disciplined observation of market signals. Rather than seeking rapid directional moves, understanding the interplay between overhead supply, short-term holder behavior, and liquidity conditions may provide a clearer framework for decision-making in uncertain times.

Stay tuned for next week's Cwallet Weekly Crypto Express, where we will continue to track evolving on-chain dynamics and refine our analysis into more accessible, structured insights that support clearer market understanding in 2026.

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Disclaimer

This content is for informational purposes only and does not constitute financial advice. Crypto assets are volatile, and all investment decisions should be based on your own research (DYOR). Cwallet assumes no liability for any losses.