Bitcoin the world’s largest digital asset by market value, has risen from around $63,000 to over $80,000 over the past three months. And the key signals that professionals are watching closely are now all pointing in the same direction: $85,000.
The rally is not just about price, but also about the ripples beneath the surface.
On-chain dynamics
Further gains appear likely as Bitcoin has surpassed two levels that on-chain analysts consider among the most important in the market: the true market average at $78,200 and the short-term holder’s cost basis at $79,100.
Here’s why these numbers matter. The true market average is the average price that active Bitcoin investors have paid for the coins they currently hold. The measure does not take into account all bitcoins ever mined, including those that have been dormant for years or lost, but focuses on coins that actually change hands between investors.
This makes it a more accurate estimate of the level that matters most to people active in the market. When bitcoin trades above this level, most active investors make profits, and when it falls below, many are underwater. That’s why analysts use it to gauge sentiment, spot periods of stress or euphoria in the market, and identify potential areas of mean reversion.
When it comes to short-term ownership cost, it represents the average acquisition cost for people who acquired parts less than six months ago. Again, this tells us the price that matters to traders, not long-term dormant holders.
Therefore, when the spot price exceeds these two levels, it reflects a bullish outlook.
“If the price were to sustain above these two levels over the coming week, the deep value regime that has persisted since early February 2026 until today would rank among the shortest such episodes in Bitcoin market history,” analysts at research firm Glassnode said in a report.
“Focus now shifts to the next major resistance at the realized active price near $85.2k, which tracks the cost basis of all non-dormant supply and represents the next structural threshold with which the market must reckon,” they added.
At the time of writing, bitcoin was trading at nearly $80,800, well above the true market average and short-term holder cost levels.
Futures Market Shenanigans
A subtle change is underway in the futures market that could help send bitcoin higher.
The signal comes from funding rates, the small recurring payments traders make to keep bets open on leveraged futures contracts. For most of the past three months, funding rates were negative, indicating unusually strong demand for betting against bitcoin in futures markets.
Much of this activity likely came from hedge funds and institutional traders pursuing a popular arbitrage strategy: buying Bitcoin or Bitcoin ETFs for spot while simultaneously selling futures contracts. This trade created steady selling pressure in the futures market even as bitcoin rallied.
Today, financing rates have returned to neutral or slightly positive. This suggests that many of these short positions have already been closed, eliminating a key source of downward pressure in the market.
This also raises the possibility of a short squeeze. If bitcoin continues to grow, traders still betting against it may be forced (pressured) to buy back futures contracts to exit their positions, which can accelerate gains.
“The shift to neutrality does not invalidate the carry trade; it indicates that shorts paying for the privilege are no longer present at scale. Either funding becomes negative again as new ETF capital recreates the trade, or the squeeze must continue,” said analysts at the OG Bitfinex exchange, explaining the potential for additional gains to come.
Options dynamics
The third signal comes from the options market, where traders use contracts to position themselves or protect themselves against price movements. Calls are bullish bets that give upside exposure if bitcoin rises, while puts are used as insurance against downside risk.
The options positioning is now configured in such a way that it can amplify the current upward movement.
Market makers, the companies that ensure market liquidity, have what’s called “short gamma” exposure around the $82,000 level, with about $2 billion near current prices, according to Glassnode.
Short gamma is important because it forces these traders to hedge in the direction of the dominant trend, which is up, to stay balanced.
In practice, this means that as Bitcoin rises, broker hedging itself may add additional buying pressure, potentially accelerating the rally towards $85,000. Market makers make money by providing liquidity, meaning they try to remain neutral about price direction rather than betting on it.
But it goes both ways. If the market were to fall, these same brokers would likely have to hedge in the opposite direction, selling in anticipation of the decline, which could increase downward pressure.
“Short gamma means traders are positioned in a way that forces them to hedge in the direction of the move, buying when the price rises and selling when it falls. This creates a feedback loop that can accelerate price action, helping to explain the recent push towards $83,000,” Glassnode explained.
Caution
None of the things discussed above happen in a vacuum. Bitcoin still trades closely with U.S. tech stocks, so if stocks suddenly stop taking risks, it can quickly slow momentum, or even halt the trend altogether.
