Bitcoin has been beating the S&P 500 on more trading days than not in recent weeks, but the price keeps failing to hold above $85,000 and has more recently struggled even to stay clear of $80,000. On-chain data points to 12 factors behind the stall, spanning demand, supply and market sentiment.
Relative strength returns
Relative strength compares how one asset performs against another over the same period. In June, Bitcoin outperformed the S&P 500 on only one day in five, its weakest stretch in more than five years. By October, the picture had flipped: Bitcoin is winning more sessions than it is losing against equities. If investors keep rotating into the stronger asset, that trend could reinforce itself.
Price has not followed. Bitcoin peaked at $87,100 on September 23, and since January it has closed above $85,000 on only five days.
Where the pressure comes from
Glassnode's findings fall into three broad areas: demand, supply and market sentiment.
Demand
- ETF flows have netted out. Most of the $653 million that entered on October 19 has already left.
- Buy orders on Binance have moved lower, toward $78,000 to $79,000.
Supply
- Long-term holders own about 4 million BTC bought between $85,000 and $118,000. Many may sell near break-even, which helps explain why the $84,000 to $85,000 band keeps capping rallies.
- Bitcoin also slipped just below the ETF cost basis near $81,500.
Sentiment and backdrop
- Economic growth has stalled and consumer confidence sits near post-2009 lows.
- Bitcoin's recovery lags its 2023 rebound.
- Speculative traders favor stocks, while altcoin breadth fades.
Early signs of stability
Not every signal is negative. Volatility has compressed to 2023 levels, losses on each dip keep shrinking, and wallets holding 100 to 1,000 BTC continue buying.
The Fed decision and the levels to watch
The Fed held rates steady on October 28, after a quarter-point hike in September. Some analysts had flagged the decision as a possible trigger, since the last two volatility lows came days before sharp moves.
On the downside, the $78,000 to $79,000 bids and the True Market Mean near $77,900 offer support. Below that, the short-term holder cost basis sits at $75,800.
On the upside, a daily close above $81,500 would put the average ETF holder back in profit. Daily closes above $85,000 would mark the next step, while a close above $87,500 accompanied by rising ETF inflows would confirm stronger demand.
For now, Bitcoin's relative strength against stocks has not translated into a decisive breakout.
