Bitcoin Enters Recalibration Phase Amid Investor Caution

After months of recovery, the bullish momentum of the Bitcoin market is abruptly fading. All indicators—spot, derivatives, ETFs—turn red, revealing a drop in liquidity, a decline in risk appetite, and a general slowdown. The latest Glassnode report confirms a phase change: euphoria gives way to caution in a fragile and unpredictable market context.

In Brief

• The Bitcoin market is undergoing a notable pause after a bullish first half of the year.
• Glassnode report data show a widespread decline in momentum.
• The spot market shows worrying technical signals, with RSI in the oversold zone.
• The drop in volumes, financing, and inflows suggests increased market caution.

A Widespread Decline in Spot, Derivatives, and Bitcoin ETF Markets

The Bitcoin market is currently going through an unstable period with massive sales and discreet buying. In its latest report, Glassnode notes a clear inflection in Bitcoin’s bullish momentum, signaling that “momentum is dissipating in spot, futures, options and ETF markets.” In the spot market, indicators show a rapid deterioration of the technical structure. The RSI (Relative Strength Index) has dropped from 47.4 to 35.8, crossing the lower threshold and entering the oversold zone. This correction is accompanied by a marked strengthening of selling pressure. The spot CVD (Cumulative Volume Delta), a key indicator of imbalance between buy and sell orders, collapses from -107.1 million USD to -220 million USD, while liquidity weakens, as evidenced by a drop in daily volume from 8.4 to 7.5 billion USD. This trio of indicators suggests a loss of buying momentum and a more active distribution phase. The phenomenon extends to derivatives and ETF markets, reinforcing the idea of a decline in risk appetite across the market. Figures published by Glassnode reveal a cautious dynamic:
• Open Interest on futures contracts slightly declines from 45.6 to 44.9 billion USD, indicating a partial disengagement from open positions;
• Long position financing falls by 33%, settling at 3.1 million USD, indicating a retreat of leveraged bullish demand;
• CVD on perpetual contracts slides from -1.2 to -1.8 billion USD, signaling persistent selling pressure;
• Open Interest on options declines by 8.4% to 39.8 billion USD, reflecting a progressive disinterest in speculative bets;
• Implied volatility (volatility spread) contracts sharply, dropping from 23.84% to 16.26%, signaling a risk reassessment by investors;
• The 25 Delta Skew rises to 5.51, exceeding its upper band, showing increased interest in bearish protection options;
• Net inflows into ETFs fall by 24.9% to 269.4 million USD, well below recent average levels;
• ETF transaction volume increases slightly by 9.9% to 19.8 billion USD, a sign of a reactive but defensive market;
• ETF MVRV ratio decreases from 2.4 to 2.3, indicating a slight retreat in average position profitability.
This coordinated decline across several market segments illustrates a shift toward caution. While no abrupt collapse is observed at this stage, the synchronization of negative signals confirms a disengagement phase.

A More Measured On-Chain Activity and Signs of Seller Exhaustion

Beyond traditional financial markets, on-chain activity offers a more contrasted reading of the situation. While the environment remains generally less active, some metrics reveal a certain balance in market structure. The number of active addresses increases by 3.6% to reach 729,000, while the Realized Cap Change metric remains high at 6.3%, indicating that capital flows continue to arrive on the network, albeit at a slower pace. In contrast, transferred volume falls by 13.9% to 9.4 billion USD, and transaction fees decrease by 14.4% to 483,200 USD, signs of more discreet on-chain economic activity. From a liquidity and capital distribution perspective, indicators remain stable. The Short-Term Holders / Long-Term Holders ratio is unchanged at 17.3%, and the speculative capital share (Hot Capital Share) remains at 36%, reflecting a relative balance between short and long-term investors. On the other hand, on-chain profitability data reflect increasing caution. The percentage of supply in profit declines to 93.6%, NUPL falls to 8.6%, and the Realized Losses/Profits ratio drops to 1.9. These elements show that, despite a still generally profitable market, profit expectations are more reserved. According to Glassnode, the market appears to be sliding from a phase of euphoria towards a phase of reassessment, with oversold conditions and signs of seller exhaustion that could suggest a short-term technical rebound. However, the overall market structure remains fragile, making any recovery scenario dependent on an external catalyst or renewed demand, still uncertain at this stage. If a rebound is possible, it rests on weak foundations, inviting caution in projections.

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Frequently Asked Questions (FAQ)

Market Trends and Indicators

Q: What does it mean that Bitcoin has entered a "recalibration phase"? A: It signifies a pause or slowdown in the market's bullish momentum, moving from a state of euphoria to one of investor caution and reassessment. Q: Which market indicators are showing a decline? A: Spot markets, derivatives markets (futures, options), and Bitcoin ETFs are all showing a decline in momentum, liquidity, and risk appetite. Q: What does a declining RSI in the spot market indicate? A: A declining RSI, particularly when it crosses into the oversold zone (below 30), suggests that Bitcoin may be due for a short-term technical rebound, though overall market structure remains fragile. Q: How is selling pressure indicated in the spot market? A: The collapse of the Cumulative Volume Delta (CVD) from negative to more negative values indicates increased selling pressure and an imbalance favoring sellers. Q: What does a drop in "long position financing" signify? A: A fall in long position financing suggests a retreat in leveraged bullish demand, meaning fewer traders are willing to pay premiums to hold long positions, indicating reduced bullish sentiment. Q: What is the significance of implied volatility contracting? A: A sharp drop in implied volatility signals that investors are reassessing risk and may be less willing to place speculative bets, leading to a calmer, though potentially less dynamic, market. Q: What does an increase in the 25 Delta Skew indicate? A: A rise in the 25 Delta Skew, especially when exceeding its upper band, shows increased demand for bearish protection options, suggesting investors are hedging against potential price drops. Q: What is the implication of falling net inflows into Bitcoin ETFs? A: Lower net inflows into Bitcoin ETFs indicate reduced institutional demand and a potential cooling of interest from large investors, contributing to market caution. Q: How is on-chain activity behaving during this phase? A: While overall on-chain activity is less active, metrics like the number of active addresses remain relatively high, suggesting continued network participation, but transferred volume and transaction fees are decreasing, indicating more discreet activity. Q: What do on-chain profitability metrics like NUPL and Realized Losses/Profits ratio suggest? A: A decline in these metrics, such as NUPL falling to 8.6 and the Realized Losses/Profits ratio dropping to 1.9, indicates that while the market is still generally profitable, profit expectations are becoming more reserved.

Crypto Market AI's Take

The current recalibration phase in the Bitcoin market highlights a common pattern of consolidation after periods of strong growth. As momentum dissipates across various market segments, investors are shifting from a high-risk appetite to a more cautious stance. This shift is clearly reflected in the deterioration of technical indicators and a decrease in leveraged positions. At Crypto Market AI, we understand the importance of navigating these market cycles. Our AI-powered tools are designed to identify these shifts early, providing data-driven insights to help you adapt your trading strategies. Whether it's through our advanced AI trading bots that can execute trades based on real-time market analysis or our comprehensive market intelligence reports, we aim to empower you with the information needed to make informed decisions in a dynamic crypto landscape. Understanding these market recalibrations is key to long-term success, and our platform is built to provide that edge.

More to Read:

• Understanding Bitcoin's Volatility: Factors and Strategies
• The Role of AI in Modern Cryptocurrency Trading
• How to Read Cryptocurrency Charts for Effective Trading

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