Bitcoin Trading Volume Declining Amid Market Uncertainty

Market sentiment shows signs of weakness as selling pressure weighs on Bitcoin prices

Decreasing spot and futures trading volumes indicate broader bearish pressure in the market

Bitcoin has rebounded slightly over the past 24 hours, trading above $110,000

Bitcoin (BTC) traded near $110,000 during early Tuesday's Asian session, with declining spot and futures trading volumes alongside reduced on-chain activity contributing to increased bearish pressure.

Technical Indicators Signal Cautious Market Sentiment

On-chain analytics firm Glassnode reported in its Monday analysis that while Bitcoin consolidates around the $110,000 level, broader market bearish pressure continues to build.

According to the report, Bitcoin's Relative Strength Index (RSI) fell from 37.4 to 33.6 last week, entering oversold territory and suggesting increased selling pressure. Additionally, spot trading volume decreased by approximately 9% to $7.7 billion, revealing weakened investor participation and uncertain market sentiment.

"Low trading volume during price movements signals weak directional conviction in recent trends, indicating uncertainty in market sentiment," analysts explained. "Reduced participation suggests bearish pressure continues to dominate market dynamics."

Similar trends appeared in futures and options open interest (OI), which showed declines over the past week, interpreted as a shift toward "risk-off" following the recent pullback from highs.

Short-Term Holder Influence Growing

The report also highlighted increasing influence from short-term holders (STH). The STH-to-LTH (long-term holder) supply ratio rose from 17.0% to 17.7%, indicating expanded participation from typically more volatile short-term market participants.

This gradual increase in bearish pressure occurred simultaneously with net buying from corporate Bitcoin treasuries and U.S. spot ETFs. These products recorded net inflows of $396 million, reversing the nearly $1 billion in net outflows from the previous week.

Cycle Analysis Suggests Room for Growth

CryptoQuant analyst Carmelo Aleman suggested that despite recent corrections, Bitcoin hasn't reached its cycle peak yet. He noted that previous bull markets featured significant corrections before establishing new highs, suggesting the current pullback could be a "healthy" correction.

Aleman added that increasing institutional adoption and growing demand for tokenization could support Bitcoin prices over the coming months.

From a Network Value to Transactions (NVT) ratio perspective, Bitcoin has maintained levels below 50 since July 7, reflecting robust on-chain activity and growth potential.

The Market Value to Realized Value (MVRV) metric also indicates that typical cycle peak zones haven't been reached, emphasizing that prices "haven't entered overheated territory yet."

Bitcoin changed hands at around $110,300 during early Tuesday Asian trading, rebounding after a slight dip to the $107,000 level the previous day.