In its latest assessment of the Bitcoin market, cryptocurrency analytics company Glassnode reported that the rejection of the $94,000 level and the subsequent drop to $85,000 weakened market momentum and increased downside risks.
According to Glassnode, increased selling pressure and thinning liquidity are causing Bitcoin to appear fragile in the short term. The company argued that derivative markets and on-chain indicators continue to give cautious signals.
The report stated that the 14-day RSI indicator retreating back towards the neutral zone signals a significant weakening in price momentum. Conditions in the spot market were also described as deteriorating.
The rapid shift of the spot CVD (cumulative volume spread) into deeper negative territory indicated increased aggressive selling pressure, while the statistically significant squeeze in spot trading volume towards the lower band signaled decreased market liquidity and weakening confidence in price movements.
Glassnode reported that the overall stance in derivatives markets remains cautious. The slight decline in futures open positions suggests limited risk reduction rather than a sharp liquidation wave.
The fact that the CVD (Current Futures) in perpetual futures contracts has fallen significantly below the lower band indicates that selling pressure is dominant, while the rise in funding rates despite the price decline shows that long positions are still present in the market. This situation leaves the market vulnerable to additional risks should the weakness continue.
Interest in the options market is reportedly continuing. While open positions remain stable, the deeply negative volatility spreads and high skew indicate that investors continue to demand protection against downside risks.
The picture is complex on the onchain side. While the number of active addresses has decreased only slightly, the jump in institution-adjusted transfer volume to the upper band indicates high capital mobility on the chain. However, the decrease in transaction fees points to weak demand for block space.
Capital flow indicators also remain fragile. While realized capital change remains low, it is noted that the influence of short-term investors on supply dynamics is increasing, and the share of “hot money” is rising. This situation makes the Bitcoin price more sensitive to volatility.
Glassnode noted that net inflows into Bitcoin ETFs have rebounded strongly, providing a partial balance for the market. However, the relatively weak ETF trading volumes indicate a cautious stance from the institutional side. The slight decline in the ETF MVRV ratio and the limited profit metrics also point to a less optimistic outlook for the market.
Glassnode stated that the rejection from $94,000 further solidified Bitcoin into a market regime focused on risk aversion and consolidation. While some indicators point to underlying activity and institutional interest, overall market sentiment remains unstable.
*This is not investment advice.
Source: https://en.bitcoinsistemi.com/why-did-bitcoin-fall-what-will-happen-next-heres-the-new-assessment/
