The Bitcoin market's fragility persists, but why? Here's the pulse check for week 45.
Technical vs. Fundamental Conflict: The market's technical momentum has stabilized, but it's a different story on the fundamental front. Weakening capital inflows and diminishing profitability paint a concerning picture. ETF outflows and slowing institutional interest reveal a liquidity challenge, and the profit/loss balance is softening.
Bitcoin's price steadied, yet it couldn't surpass short-term holders' cost basis. A modest momentum improvement and controlled volatility were observed.
RSI and CVD Insights: The RSI reached 55.7, indicating a healthier momentum without overvaluation concerns. Spot CVD firmed up as selling pressure decreased, but a 11.4% drop in spot volumes to $10.9B suggests a quieter market.
Derivatives Update: In the derivatives market, funding payments softened, and futures CVD dropped to -$789.6M, a sign of renewed selling pressure. Options OI decreased by 7.7% to $49.2B, and the Volatility Spread widened to -6.45%, indicating heightened hedging activity. The 25-Delta Skew increased to 9.17%, further emphasizing this trend.
ETF Profit-Taking: ETF flows turned negative with outflows of $617.2M, suggesting profit-taking and softer institutional appetite. However, volumes remained stable at $24.6B. The MVRV ratio's decline to 2.05 implies reduced unrealized profits and potential selling pressure.
On-Chain Activity: On-chain data shows active addresses ticking up to 687K, and transfer volumes skyrocketed 27.6% to $11.1B, indicating robust capital movement. Fee volumes dipped slightly, and Realized Cap Change increased to 3.5%, aligning with gradual accumulation.
Structural Insights: Short-term holder supply increased to 18.2%, and Hot Capital Share reached 35.4%, suggesting speculative activity. The Percent Supply in Profit dropped to 84.0%, a level often seen during accumulation phases.
NUPL and Profit-Loss Dynamics: The NUPL slipped to -2.1%, indicating ongoing unrealized losses. Conversely, the Realized Profit-Loss Ratio improved to 1.7, hinting at selective profit-taking as market sentiment recovers.
Market Outlook: The market's fragility continues as technical stability clashes with fundamental weaknesses. On-chain accumulation is evident but lacks conviction, implying capital redistribution rather than new money. Without stronger inflows or liquidity injections, the market could face an extended consolidation period or even a prolonged bear market as confidence gradually returns.
Off-Chain and On-Chain Indicators:
- Off-Chain Indicators: [List of off-chain indicators and their implications]
- On-Chain Indicators: [List of on-chain indicators and their interpretations]
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Disclaimer: This report is for educational purposes only. It does not offer investment advice, and any investment decisions should be made independently. Exchange balance data is derived from various sources, and while we aim for accuracy, it may not always reflect the complete reserves of exchanges, especially those not disclosing official addresses. Use this data with discretion, and refer to our Transparency Notice for more details: https://docs.glassnode.com/further-information/exchange-data-transparency-notice
