Bitcoin Bullish Momentum Builds But $78K Stays a Challenge

Bitcoin's bullish momentum is building — the asset surged to a four-week high on Wednesday, March 4 — but a recovery toward the $78,700 January monthly close is proving harder than the price action alone suggests. Despite a 22% rally off the $60,000 local bottom struck on February 6, derivatives and on-chain data paint a picture of persistent bearish conviction rather than broad-based accumulation.

Derivatives Signal Caution, Not Confidence

The options market tells a blunt story: professional traders are still hedging downside, not chasing upside. Put (sell) options have recently traded at a 10% premium over equivalent call (buy) instruments — a spread that sits far outside the neutral range of -6% to 6% last recorded in mid-January, when Bitcoin was hovering near $95,000. That neutral window has not returned, and the gap signals ongoing institutional anxiety about further losses.

The futures market confirms the same hesitation. The annualized basis rate — which measures how much futures contracts trade above spot price — currently sits below the 5% neutral threshold, indicating that demand for leveraged long exposure remains stagnant. Bears appear comfortable despite prices pushing above $73,000, which itself points to a deeper structural problem: a massive portion of the market is still underwater.

Why Is Bitcoin Struggling to Break Above $78,000?

Bitcoin is struggling to clear $78,000 because of two overlapping forces: a large pool of holders sitting at a loss who are likely to sell into recovery rallies, and a set of major corporate holders whose average cost basis sits directly in that price zone. According to Glassnode data, 43% of the total Bitcoin supply is currently held at a loss — measured by the price at which each coin last moved on-chain. That figure spiked sharply from 30% when BTC traded at $90,000 in late January.

Traders fear that these underwater holders will exit as the price climbs, generating what analysts call persistent overhead sell pressure — a ceiling that repairs itself every time buyers push through. The psychological threshold is clear: $76,000 is the approximate average cost basis for major corporate holders, including Strategy, which has accumulated 720,737 BTC since first entering the market in August 2020. Other publicly traded entities — Metaplanet and Twenty One Capital — face comparable valuation headwinds under current market conditions.

Bears have a structural incentive to keep Bitcoin pinned below $76,000. At prices above that level, companies like Strategy can issue new shares without diluting existing holders — a mechanism that effectively funds further BTC accumulation and reinforces upward momentum. Suppressing the price below cost basis removes that advantage and keeps corporate buying pressure dormant.

Market participants looking to suppress the price have strong incentives to keep Bitcoin pegged below $76,000.

— Cointelegraph analysis

Miner Profitability Hits Record Lows as AI Demand Bites

The Bitcoin mining industry is facing a separate but compounding source of selling pressure. The Bitcoin Hashprice index — which quantifies the expected daily revenue earned per terahash per second of hashing power — crashed to $30 on Tuesday, down from $39 just three months ago. That decline reflects a brutal combination of rising energy costs driven by the exponential growth in AI infrastructure demand and declining transaction fee revenue from the Bitcoin blockchain.

Several major publicly listed mining companies have responded by pivoting toward high-performance computing and AI workloads, offloading their Bitcoin holdings in the process. Investors now fear that miners who spent months accumulating BTC as a strategic reserve are becoming net sellers — an added source of overhead supply that could extend the consolidation phase. Mining firms that once championed a Bitcoin treasury strategy are quietly evaluating more profitable alternatives in the AI computing sector.

What Does This Mean for the Path to $78,700?

A recovery to $78,700 — the level Bitcoin closed at in January — remains the bull case target for this week's momentum. The 22% rally from the February low demonstrates that buying interest exists, and a decisive break above the $76,000 corporate cost basis zone would remove a key psychological obstacle. Once bears lose that anchor point, the incentive structure shifts: Strategy and similar holders regain share-issuance capacity, meaning fresh BTC buying could accelerate quickly.

However, the timeline is uncertain. The month-long consolidation following Bitcoin's 32% crash in early February has not yet produced a convincing shift in derivatives positioning. Until put option premiums normalize toward the neutral range and the futures basis climbs above 5%, the data suggests bulls are climbing a wall of worry rather than riding genuine conviction. A break above $78,700 would likely flip the narrative — but reaching that level first requires clearing the overhead supply accumulated by holders who entered above $76,000.