rewrite this title Bitcoin must hold $92.5k amid accumulation phase reminiscent of May 2021

Bitcoin (BTC) is on the verge of a decisive market juncture and must hold above $92,500 to maintain bullish momentum, according to a recent report by Glassnode. 

The report highlighted parallels between the current price structure and previous cycle peaks, raising concerns about potential downside risks should buying pressure wane.

Supply conditions and historical patterns

A key metric in assessing Bitcoin’s vulnerability is the supply held by short-term holders (STH), which mirrors patterns seen in May 2021. Similar accumulation trends during that cycle led to heightened sensitivity to price declines, triggering large-scale distribution events.

Bitcoin’s current price hovers between $1,000 and $5,000 above the STH cost basis of $92,500. This level has historically acted as a critical pivot point, marking the boundary between bull and bear trends. 

If Bitcoin falls below this threshold, the report warns of a possible cascade of selling pressure, reminiscent of previous post-all-time-high (ATH) corrections in May and November 2021, as well as February and April of last year.

Past corrections have followed a familiar pattern: a rally into price discovery followed by a consolidation phase where realized supply density spikes and selling pressure mounts.

Historical data suggests that if bearish conditions intensify, Bitcoin could retrace toward the lower band of the STH cost basis model, which currently stands at $71,600.

The report added that if Bitcoin breaches the $92,500 threshold, panic selling among short-term holders could accelerate losses. Conversely, if demand remains strong, BTC could stabilize above its ATH and establish a new trading range, delaying further downside risks.

Derivatives sentiment

Market momentum is fading, reflected in weakening open interest and declining perpetual futures funding rates. 

While Bitcoin and Ethereum (ETH) funding rates remain slightly positive, Solana (SOL) and memecoins have seen funding rates turn negative, signaling a shift toward a risk-off sentiment.

The open interest (OI) contraction further supports this risk-off trend, as memecoins’ OI dipped 52.1%. Comparatively, Bitcoin’s OI declined around 11.1%. 

The steep decline in memecoin OI highlights a rapid retreat of speculative capital, suggesting traders are exiting riskier bets amid growing market uncertainty.

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