As has happened in the past, Bitcoin (BTC) reached reinvigorated demand levels this week.
The digital asset has fallen below $90,000, continuing its decline for several weeks, and is now consistent with technical and on-chain indicators typical of depletion phases.
Short-term momentum continued to deteriorate this week. The Relative Strength Index (RSI), which measures the speed and change of BTC price movements, fell from 34.1 points to 27.3 points in seven days. This puts the market in an oversold zone. Analysis firm Glassnode points out: This low reading is often associated with seller exhaustion and the initial stages of stabilization.
In the derivatives market, bearish pressure on Bitcoin intensified last week. Futures cumulative volume delta (CVD) decreased to -$449.9 million. Meanwhile, CVD for perpetual contracts also fell significantly, to -$1 billion, reflecting a clear sell-side advantage.
CVD is important because it shows the cumulative difference between active buying and selling volumes in the market. Additionally, it can help you understand whether Bitcoin’s decline or rise is caused by real pressure or more technical and benign movements.
Bitcoin leverage is low
Despite the CVD movement, Bitcoin open interest last week remained stable at $34.5 billion. It shows the following There was no significant increase in leverageBut it’s a more orderly sales process.
Meanwhile, the spot market showed volumes virtually unchanged, with a weekly record close to $13.5 billion.
In parallel, Bitcoin ETFs showed a decrease in the intensity of capital outflows. Net withdrawals decreased from -$1.2 billion to -$774 million for the week. This represents a moderation of 36.9% and suggests that selling pressure from traditional investors is starting to ease. This can be seen in the following graph.
Defensive market in demand
Regarding the Bitcoin options segment, the market remained defensive and demand was reinvigorated. For example, the 25 delta bias, one of the most commonly used metrics to measure implicit sentiment in derivatives markets, was 9.52%.
The above reflects the continuity of demand for protection from a downtrend. Similarly, the volatility gap has recovered to 8.44%. It shows the following Traders expect even sharper fluctuations In terms of price.
Regarding activities on the Bitcoin network, Glassnode is reporting an overall decline. Over the seven-day period, remittances decreased by 6.8% to $12.5 billion. The above shows that the capital movement rate is low.
Transaction fees also fell, recording a decrease of 14.3%. This indicates a less congested network and less speculative environment.
On top of that, Bitcoin realized market capitalization drops from 2.5% to 2.1% within a week. This reflects weakening net capital flows and heightened caution among participants. This is noteworthy considering that this indicator calculates the total value of all Bitcoins based on the last price each Bitcoin moved.
Bitcoin profitability worsens
Similarly, profitability indicators have visibly deteriorated. Supply as a percentage of profits fell to 70.2%, and net unrealized gain or loss, which measures whether Bitcoin holders have a profit or loss relative to the price they acquired their coins, fell to -12.4%. These are levels typically associated with market stress and advanced correction stages.
At the same time, the supply ratio of long-term and short-term holders increased from 18.4% to 19.1%, as seen in the following graph. This is a bigger sign Advantages of currency in the hands of short-term holdersa common feature of the last section of the amendment.
According to Glassnode, short-term holders (STH) are people whose coin has fluctuated in the past 155 days, a group that is more sensitive to price and associated with speculative behavior.
Long-term holders (LTH), on the other hand, are people who hold Bitcoin without moving for more than 155 days, representing the most stable capital in the market and not tending to react to short-term fluctuations.
This last classification has been questioned by prominent analysts such as Willy Wu, who describes this measurement as “outdated”. This is because it leads to incorrect interpretations of the movements of those known as veteran investors. And Bitcoiner.
Bitcoin accumulator sells due to “fatigue”
In consultation with CriptoNoticias, on-chain analyst Carmelo Aleman explained that long-term holders have been selling since July, mainly out of “fatigue” with months of volatility and no sustained trend.
He said: These participants accumulated profits of 60% to 80%. And that profit-taking reacts to a lack of long-term direction.
He added that this pattern is not typical of a severe bear market. Expect big sales by whales and major companies.it’s not happening.
His reading is that large groups manage demand because they absorb the sales of smaller participants. It also includes short-term investors who have held for less than 155 days.
Following this order of thought, Glassnode concludes: Bitcoin market is entering a consolidation phaseits development depends on whether selling pressure continues to decline.
If previous patterns hold, the digital asset could form a local floor in the $94,000 to $100,000 range, a level that has historically served as a fresh start for demand, the company said.
