Glassnode Weekly On-Chain Report: Stalling at Support, Short-Term Holder Capitulation, and Recap of the $78K Cost Basis Zone

Author: Glassnode Research Team

Edited by: TechFlow

TechFlow Summary: In the past week, the crypto asset market endured two consecutive severe shocks: first, Binance disclosed a historic security breach involving $6.3 billion, followed by the conclusion of the 2026 U.S. midterm elections, which saw the Democratic Party unexpectedly sweep both chambers, restructuring the political landscape. Despite this, Bitcoin's spot price demonstrated remarkable downside absorption resilience after a ~10% technical correction from its September high, showing extremely strong buy-side support at the core support band of $76,000 to $78,000.

This edition of the Glassnode flagship weekly on-chain report provides a highly detailed data deconstruction of current spot supply distribution and derivatives long/short positions. On-chain data shows the percentage of supply in profit cooled rapidly from an extremely greedy 97.5% in early October back to 38%, indicating that a large portion of short-term speculative unrealized profits has been thoroughly washed out; excessive long leverage in futures contracts has been forcibly cleared, while short liquidation positions nearing $87,000 above are accelerating their accumulation; meanwhile, the options market exhibits an asymmetric structure post-midterms where distant-dated call options significantly dominate puts. Although incremental off-exchange capital via U.S. spot ETFs remains cautious in the short term, Bitcoin's daily win rate against the S&P 500 index has returned to the 50% equilibrium line, signaling that the broader crypto market is building a consolidation platform for the next phase on a more robust risk-reward foundation.

Core Highlights

The unrealized profit ratio for Bitcoin short-term holders has dropped sharply from nearly 100% across the board in early October to the current ~38%. This significant decline indicates that the current market valuation expansion is far below the peaks reached in September, meaning overall market bubble risk has been substantially digested.

Bitcoin price is currently making a precise retest of the key technical breakout level completed in August. The True Market Mean for active investors currently sits at $77,700, while the STH Cost Basis rests near $75,700.

This price correction has almost completely washed out the massive amount of high-leverage long positions accumulated since the August breakout. Meanwhile, open short positions above the price are expanding counter-trendally, with the largest cluster of short liquidation levels densely piling up near the $87,000 mark.

In the options derivatives market, call option open interest significantly surpasses put options. The largest single call option positions maturing in late December are concentrated in the high strike price range of $80,000 to $120,000.

Spot trading volume remains firmly sustained at roughly 1.5 times the pre-August rally baseline. However, over the past two statistical weeks, U.S. spot Bitcoin ETFs recorded a net outflow of nearly $1 billion in aggregate.

Over the past two months, Bitcoin has shown strong relative resilience against traditional mainstream equities, winning half of its daily matchups against the S&P 500 index. This marks the first time since March 2025 it has returned to the 50% win-rate equilibrium line.

Facing the impact of the $6.3 billion theft—the largest loss event in crypto history—the broader market only experienced a minor ~3% pullback, demonstrating extremely resilient liquidity absorption.

The U.S. midterm elections concluded with the Democrats gaining control of both the House and Senate. Reviewing three historical midterm election cycles, Bitcoin often undergoes one final dip before forming the cycle's macro bottom post-election; however, adjustments in this cycle were largely priced in ahead of voting day, with prices instead posting slight gains since Election Day.

In the altcoin market, short-term holders have turned broadly unprofitable across most tokens, representing a severe washout compared to the ~80% profitable token state seen in late September.

Chart: Overview of Key Metrics Across All Dimensions of the Glassnode On-Chain Macro Compass

A Healthier Supply Reset

Just recently in early October, Bitcoin supply held by short-term holders (defined as on-chain addresses that purchased within the last 155 days) was nearly 100% in unrealized profit. At that time, the "Supply in Profit held by Short-Term Holders (STH Supply in Profit)" climbed and stabilized above 97.5%. We have consistently marked this extreme range in past research reports as a highly risky "Sell Warning Line," as it meant almost every recent buyer held substantial floating profit chips ready to be cashed out at any moment.

As prices pulled back ~10% from their September highs, this metric has plummeted to around 38%, meaning the vast majority of short-term holder supply is now in unrealized loss. Compared to the extreme tension a month ago, current market speculative frenzy has been greatly cooled and reset. If, provided spot prices hold steady, this indicator can recover upward above the 50% neutral balance line, it will clearly indicate that a new wave of incoming buyers has returned to profitability and re-established confidence in future positions.

Chart: Short-Term Holder Supply in Profit Retreats to 38%, a Historically Healthy Washout Zone

Retesting Key Breakout Levels

During the volatile uptrend from August to September, Bitcoin strongly reclaimed several key moving averages and cost bases that had been temporarily lost after reaching all-time highs in 2025. These critical indicators include the 200-day Moving Average, the STH Cost Basis representing the average purchase cost for recent entrants, and the "True Market Mean" reflecting the average holding cost for all active network investors.

In our previous on-chain analysis, we explicitly noted that during Bitcoin's two deep pullbacks throughout October, prices found precise support above the True Market Mean. On November 3, the spot closing price briefly dipped below this level (currently positioned at $77,700), hitting an intraday low of $76,100 overnight, but bulls quickly exerted force to push it back above the moving average.

Chart: Bitcoin Price Retraces to Test Key Support Zones of Active Investors' True Market Mean and 200-Day MA

Following a successful high-volume breakout, such a deep downward retest is a highly standard and healthy pattern: those key resistance levels that took months to painstakingly reclaim are now transforming into underlying support floors. The STH Cost Basis at $75,700 and the 50-week Moving Average are closely hugging below the spot price, providing multiple layers of technical buffer. As long as Bitcoin maintains stable operation above these core moving averages, the solid bullish structure established since August remains intact.

Dense Accumulation of Short Liquidations Above

The Liquidation Heatmap accurately simulates the capital volume that would passively trigger flat stops across different price levels for high-leverage futures positions. This round of volatile pullback since the September high has systematically crushed and cleared the massive cluster of long liquidation positions densely stacked below the chart since August, fundamentally and significantly reducing systemic risks of cascade-style waterfall sell-offs caused by chain-reaction long liquidations.

Currently, residual effective liquidation bands below the spot price are mainly concentrated in the $73,000 to $76,000 zone, where they form powerful resonant support alongside the STH cost floor and the 200-day MA. Deeper down in the undershot zones, only larger liquidation fault lines left behind during August's unilateral breakout remain, specifically in the $60,000 to $63,000 range.

Chart: Distribution of Long and Short Positions in Global Bitcoin Perpetual Contract Liquidation Heatmap

In stark contrast to the massive deleveraging of longs, short liquidation positions above the chart are swelling rapidly over the past week, despite the spot price actually only dropping ~3.5%. This significant data divergence indicates that a large number of derivatives traders aggressively chased shorts as prices continued to probe lower. Currently, the largest cluster of short liquidations is densely piled up near $87,000, highly overlapping with the stage high set in September. Once spot buying pressure drives a price rebound, these accumulated short positions will be forced to cover at a loss, potentially providing abundant fuel for a short squeeze targeting that resistance level.

Options Market Leans Bullish

Regarding the options market, the next two largest expiring contracts are due on November 27 and December 25, carrying total open interest values of $5.7 billion and $12.5 billion, respectively. The pain points for these two key maturities (strike prices where the highest proportion of options expire worthless) sit at $80,000 and $76,000, perfectly flanking the current spot price. This means that purely from an options pain-point mechanism perspective, there is no unilateral magnetic attraction effect pulling the market decisively in one direction.

Chart: Matrix of Long/Short Open Interest Distribution Across Major Option Strike Prices Before Year-End

Looking at the full panoramic holdings across all maturities, global traders currently hold approximately $18 billion in call options, vastly surpassing the ~$13 billion in put options. Among the critically important late-December expirations, the largest call positions are heavily clustered at extremely high strikes of $80,000, $90,000, $100,000, and $120,000, while corresponding protective puts remain mostly submerged at lower strikes of $60,000 and below, primarily serving as tail-hedge tools against extreme black swan drops. This asymmetric supply distribution clearly points to a structurally bullish strategic positioning by institutional traders heading into year-end.

Trading Volume Remains Solid

Spot trading and ETF turnover volumes surged when the technical breakout occurred in August, subsequently maintaining relatively robust activity throughout September and October. Over the past two weeks, global daily spot trading volume has stabilized at approximately $24 billion, a full ~50% increase compared to the baseline prior to the early-August breakout rally.

Chart: Trends in Global Daily Bitcoin Spot Trading Volume and ETF Turnover

Admittedly, measured against the frenzy surrounding the initial approval and launch of Bitcoin spot ETFs earlier this year, overall current trading volume remains in a relatively moderate central range. Nevertheless, even after major corrections, daily volume has held steady at 1.5 times the pre-breakout level, fully demonstrating that transaction depth across the entire spot market remains solid and is definitely not in a liquidity vacuum devoid of absorption capacity.

Spot ETF Capital Shows Caution

Notably, however, the contribution from U.S. spot Bitcoin ETF channels to the currently sustained high volumes remains extremely limited. Over the past two statistical weeks, U.S. spot ETFs collectively recorded nearly $1 billion in net outflows, averaging about $115 million per day. Since prices retook the $85,000 level in mid-September, ETF inflow momentum has begun showing visibly weakening and stagnating trends.

Chart: Recent Sustained Net Outflow Trend of U.S. Spot Bitcoin ETFs

Our deep qualitative assessment of this phenomenon is that current market absorption and turnover are primarily driven by existing capital within the crypto industry, functioning more as structural position reallocation and hedging among current capital across different assets or derivatives accounts. Meanwhile, incremental external capital from traditional institutions outside the crypto-native ecosystem continues to patiently observe from the sidelines due to uncertainties surrounding macroeconomic policies and the election.

Outperforming Traditional U.S. Equity Benchmarks

Extending the view to macro asset performance over the past two months, Bitcoin has cumulatively dipped slightly by ~2%. This pullback magnitude roughly aligns with the S&P 500's less-than-1% decline during the same period, but notably outperforms major European indices like Euro Stoxx, and significantly beats spot gold which plummeted ~9% simultaneously. Although Bitcoin briefly led traditional equity indices by a wide margin in early October and later surrendered all excess returns during the subsequent correction, it did not fall out of step with the broader rhythm of traditional macro risk assets throughout the drawdown.

Chart: Comparative Performance of Bitcoin Versus S&P 500, Gold, and Global Mainstream Assets

Regaining Equilibrium Against the S&P 500 Index

Within the past 90-trading-day statistical window, Bitcoin outperformed the S&P 500 index on exactly half of those trading days, and also exhibited a slight edge in average daily returns. This marks Bitcoin's daily win rate against traditional U.S. equity assets returning above the 50% watershed for the first time since March 2025.

Chart: Bitcoin's Rolling 90-Day Win Rate Against the S&P 500 Index

The return of the daily win rate to a balanced 50/50 split formally signals the phased end of Bitcoin's passive situation of continuously lagging behind the U.S. equity market over the past year-plus. Should this win rate metric effectively break through 50% and sustain an upward trajectory over extended periods, it will become a key precursor for Bitcoin to re-establish its leading strength-and-weakness cycle relative to traditional stock assets within the macro capital pricing framework.

Digesting Binance's Historic Theft Shock

On October 29, Binance, the world's largest exchange, officially reported a major security incident involving an attack on its hot wallet. According to the platform's own disclosure, the involved capital volume reached approximately $6.3 billion. This makes the incident unquestionably the largest single hacker theft in terms of financial loss since the inception of the crypto industry, with a scale even exceeding the combined historical losses of the top nine security breaches previously ranked in the sector.

Chart: Review of Bitcoin Spot Price Movements Before and After Binance's Historic Hack Attack

However, contrary to what most market participants expected: within days of the news breaking, Bitcoin's spot price only experienced a brief ~3% dip before rapidly rebounding and recovering to levels near its pre-abnormal-outflow starting point. Faced with such a massive extreme negative shock, the market response was exceptionally restrained and calm, which fundamentally serves as compelling proof of the market's deep liquidity absorption capacity and intrinsic antifragility. As long as external incremental capital flows back in the future, a trading base that has already fully digested and survived such a monumental black swan event will possess enormous upward elastic potential.

After Midterm Elections Conclude

In the U.S. midterm elections held on November 3, the Democratic Party achieved an unexpectedly strong performance in congressional races, simultaneously securing control of both the House of Representatives and the Senate. Reviewing the past three historical U.S. midterm election cycles, Bitcoin typically experiences a final deep plunge ranging from 15% to 50% within two to ten weeks post-voting day, before definitively confirming its four-year macro bottom.

Chart: Comparison of Bitcoin Price Cycle Drawdown Paths Before and After Historical U.S. Midterm Elections

But in stark contrast to historical scripts, adjustments in this cycle were almost fully priced in and released by the market right before voting day: from the September high to Election Day, Bitcoin had already prematurely drawn down ~11%, and after the election dust settled, prices actually posted a slight rebound of ~1.5%. Looking long-term, the entire industry indeed needs to gradually adapt to a new Congress fully dominated by Democrats; however, it is crucial to emphasize that today's integration depth between Bitcoin and the traditional Wall Street financial system is incomparable to past years. The deep involvement of major traditional banks, hundred-billion-dollar asset management firms, and spot ETFs has rendered Washington-backed partisan transition risks no longer capable of the disruptive devastation they once possessed a few years ago.

Altcoin Shakeout and Capitulation

Compared to Bitcoin's mild resilience against declines, the altcoin market's technical correction has undoubtedly been far more brutal. The STH-SOPR (Short-Term Holder Spent Output Profit Ratio) precisely measures whether short-term traders are selling at a profit (indicator > 1) or cutting losses (indicator < 1). During the height of the trend in late September, among the 300+ mainstream altcoins we continuously track, nearly 80% of tokens saw their short-term holders in a euphoric phase of taking profits.</p>

Chart: Cliff-like Drop in Realized Profit Ratios for Short-Term Holders Across Tracked 300+ Altcoins

By the end of October, this profit ratio has cliff-dived to merely ~12%, with short-term holders across the vast majority of altcoins currently being forced out at small losses. Previous strong profit-taking positions have entirely transformed into today's panic-selling capitulation. As long as Bitcoin continues to hold its key moving average retracement levels, an altcoin market that has been thoroughly cleaned of recent impatient profit-chasers will boast a far healthier foundation than the extremely crowded, overheated leveraged speculative frenzy of late September.

Conclusion

In summary, Bitcoin has basically fully digested and washed out the excessive speculative bubbles accumulated in September: short-term holder supply has swung from near-universal profitability back to widespread unrealized losses, altcoin speculative positions have undergone deep deleveraging, and spot prices are making highly standard retracements to confirm the technical validity of the August breakout. Global spot trading volume remains robust, successfully holding the line even against black swan impacts like the historic exchange theft. The only remaining deficit is simply that traditional incremental capital from outside the crypto ecosystem has not yet fully returned.

Compared to the suspended and fragile state during September's highs, the current market structure undeniably provides an entry window with a much healthier and balanced risk-reward ratio. The core defensive line for future monitoring lies in the composite dense zone between $73,000 and $76,000, fortified jointly by the STH cost basis, the critical 200-day MA, and substantial contract liquidation floors. As long as this defense line is not effectively breached, the current retracement remains classified as an extremely healthy supply turnover and technical reset within the broader August uptrend. Only an effective breakdown of $73,000 would signal that the market needs to enter a more prolonged sideways consolidation phase.