Woofun AI reports that Bitcoin’s attempt to reclaim the $70,000 level has stalled due to coordinated selling pressure from both long-term and short-term holders, despite a backdrop of improving technical regime scores. The core conflict emerges as recovering demand struggles to absorb the supply generated by investors exiting positions during the rebound, creating a resistance zone that tests the sustainability of the current price action.

The selling pressure from long-term holders is driven by a strategic reduction of unrealized losses rather than panic dumping. As coins cycle in and out of the long-term cohort, the moving cost basis for these assets has risen to approximately $80,800. At current market prices, this valuation leaves many holders with substantial negative equity. Data from Glassnode indicates that realized-loss volume from this cohort increased significantly as Bitcoin approached the $66,000 mark. This recent price rebound provided underwater investors an opportunity to exit at smaller losses compared to the depths experienced when the cryptocurrency traded below $60,000.

Notably, more than 65% of exchange inflows are currently attributable to long-term holders realizing losses. This distribution pattern is consistent with prior bear market phases, where this specific cohort dominated the sell side and dictated short-term price ceilings.

Simultaneously, short-term holders are supplying the market for the opposite reason: profit protection. Investors who accumulated Bitcoin near the June lows are now taking profits at volumes not seen since the market’s peak in May. These two distinct groups entered the market at different price points and are recording divergent financial outcomes. Long-term holders are focused on minimizing capital erosion, while recent buyers are securing gains.

However, the net effect is identical: both groups are adding Bitcoin to the sell side as the asset attempts to move higher, creating a supply ceiling that counteracts buying interest.

Structurally, this supply surge coincides with a bullish turn in the Bitcoin Regime Score developed by CryptoQuant analyst Axel Adler. This composite metric aggregates multiple data streams, including taker flows, open interest pressure, funding rates, ETF activity, exchange flows, and the overall price trend. The score spent roughly four-fifths of the past week in positive territory, a significant improvement compared to about three-fifths of the full month. The metric reached a high of 65.3 on July 10 before retreating toward neutral levels four days later. Crucially, this pullback did not develop into a sustained negative reading, suggesting underlying strength despite the price stagnation.

Woofun AI data shows.A more critical variable is the strengthening agreement among the model's components, reflected in the Regime Confidence metric. Over the past 24 hours, Regime Confidence rose from 54.9% to 79.4%, placing it just below the model's 80% high-confidence threshold. The seven-day average for confidence has also increased to 64.3%, compared with 57.3% for the full month. The simultaneous rise in both the primary score and the confidence metric suggests that the current improvement is supported by several market inputs rather than being driven by a single unusually strong component, lending greater validity to the bullish signal.

Despite these positive technical shifts, the indicators have yet to produce a decisive price breakout. For the recovery to regain momentum, the Regime Score must return above 50 while confidence remains near 80%. This combination would provide stronger confirmation that the market structure has shifted from distribution to accumulation. Until such a configuration is sustained, the current price action remains vulnerable to reversal, as the technical setup has not yet overcome the immediate supply constraints.

The improving regime now faces its first major test in a region where short-term holder supply overlaps with a heavy concentration of call open interest. The short-term holder cost basis is situated near $69,000, lying directly within this options corridor. Consequently, Bitcoin could encounter selling from recent buyers returning to break even at the same time that options traders and market makers begin adjusting positions around the largest call strikes. This convergence creates a dense resistance zone where spot selling and derivatives hedging may reinforce each other.

Open interest data alone does not reveal whether this positioning reflects outright bullish trades, covered call sales, volatility strategies, or portfolio hedges. Every options contract involves both a buyer and a seller, meaning the total open interest is an incomplete measure of directional conviction.

However, these concentrations identify specific levels where hedging activity could increase as Bitcoin approaches the strikes, particularly around large expirations. Such adjustments can amplify price movements in either direction, potentially exacerbating volatility if the market fails to clear this corridor decisively.

Clearing the options corridor will depend on whether the recent improvement in demand translates into a broader, more sustained recovery. Bitcoin would therefore need continued spot and ETF buying to absorb sales from recent buyers returning to break even and older holders using rallies to reduce losses. There are early signs that pressure from long-term holders may be easing, as the cohort's 30-day average realized-loss volume has begun to retreat from its recent high. Previous bear markets established firmer footing after that measure peaked and entered a sustained decline.

However, the current rollover remains too brief to confirm that the heaviest distribution has ended. Until demand strengthens and selling by holders eases more decisively, Bitcoin remains caught between improving market signals and supply that emerges during recoveries.