The price continued its downward trajectory throughout the week, falling beneath $68k before finding a floor around $65k, and then experiencing a slight recovery toward $67k as the weekend approached. The underlying momentum remains precarious, with the short-term price pattern still characterized by lower peaks.
Overview
Spot markets mirror this cooling sentiment, as trading volumes have decreased and overall activity remains muted. The decline in participation suggests that buyer interest is still hesitant, with investors showing limited confidence at the current price points.
Derivatives positioning indicates a more balanced yet cautious environment. The open interest in futures has seen a slight increase, while funding rates have firmed, hinting at a leaning towards long positions. Concurrently, the selling pressure in perpetual markets has lessened, implying that bearish bets are becoming less pronounced.
Options markets experienced a significant drop in open interest, reflecting a reduction in speculative trading. Given that the volatility spread was previously negative, hedging activity appears subdued, further emphasizing a more complacent attitude among options traders.
ETF flows have shifted to net outflows, coupled with a modest decrease in trading volume. This change suggests that institutional interest has waned, and capital rotation has slowed following earlier periods of strong inflows.
On-chain data reveals a market that is still facing pressure but is beginning to show early signs of stabilization. Profitability has diminished, the realization of losses has accelerated, and network activity has weakened; however, capital outflows are showing a trend of reduction.
In summary, the market appears to be moving away from active distribution towards a more neutral stance. While market conditions remain delicate, the easing of selling pressure and the stabilization of capital flows suggest that the foundation for a potential recovery is being laid, although more robust demand is still necessary to confirm a lasting positive shift.
Off-Chain Indicators
On-Chain Indicators
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Information compiled from materials : insights.glassnode.com