BTC Market Pulse: Week 3

Overview

Spot market conditions remain fragile. Trading volume has rebounded modestly from cycle lows, pointing to early signs of liquidity rebuilding, however spot CVD has deteriorated, signalling rising sell-side dominance and a more defensive near-term posture. Derivatives positioning is mixed. Futures open interest has edged higher, reflecting a mild rebuild in speculative engagement, while long-side funding has risen sharply, signalling renewed willingness to pay for bullish exposure. In contrast, perpetual CVD has flipped deeply negative, highlighting elevated sell-side aggression across leveraged markets.

Options markets continue to price elevated uncertainty. Options open interest has risen materially, while the volatility spread has widened well beyond its statistical high band, signalling that implied volatility continues to materially outpace realised levels. The 25-delta skew has also trended higher, reflecting a growing bid for downside protection

US spot ETF netflows have reversed into heavy outflows beyond statistical extremes, signalling pronounced institutional de-risking. Despite this, ETF trading volume has risen, highlighting active re- positioning. ETF holder profitability remains elevated, maintaining an elevated profit-taking risk.

Active addresses have eased modestly, while transfer volume has surged, pointing to heightened capital reallocation. Network fees have drifted toward statistical lows, reflecting a quieter transactional backdrop. Capital flows show early signs of stabilisation, while the share of supply held by short-term participants remains elevated, reinforcing heightened speculative sensitivity.

Overall, the market remains in a fragile consolidation phase. While early signs of engagement rebuilding are emerging, elevated institutional de-risking, defensive options positioning, and persistent speculative sensitivity suggest that renewed spot-led demand remains necessary to re-establish a sustainable upside trend.

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Disclaimer: This report does not provide any investment advice. All data is provided for information and educational purposes only. No investment decision shall be based on the information provided here and you are solely responsible for your own investment decisions.

Exchange balances presented are derived from Glassnode’s comprehensive database of address labels, which are amassed through both officially published exchange information and proprietary clustering algorithms. While we strive to ensure the utmost accuracy in representing exchange balances, it is important to note that these figures might not always encapsulate the entirety of an exchange’s reserves, particularly when exchanges refrain from disclosing their official addresses. We urge users to exercise caution and discretion when utilizing these metrics. Glassnode shall not be held responsible for any discrepancies or potential inaccuracies

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