- Bitcoin reached a new ATH above $123K before retracing to $114K, with spot momentum softening and sellers dominating recent activity.
- Derivatives markets showed elevated open interest and strong options activity, while perpetual CVD revealed intensified sell-side pressure across leveraged positions.
- On-chain data reflected weaker user activity but rising transfer volumes, while profitability metrics showed 96% of supply in profit.
Bitcoin touched a new all-time high above $124,000 last week before slipping toward $114,000, as market strength showed signs of fragility.
Spot Market Pullback Meets ETF Inflows
Data from Glassnode revealed that Bitcoin’s spot price briefly surged before retreating toward a recently formed gap near $114,000. Spot market activity softened, with cumulative volume delta (CVD) turning more negative and sellers dominating short-term momentum. Trading volumes temporarily recovered, yet the prevailing trend showed cooling strength.
Momentum indicators such as the Relative Strength Index also softened to reflect decreasing aggressive buying pressure. The reversal was an indication of growing caution among players as profit taking gained momentum at higher levels.The move brought down overheated conditions but raised traders’ anxiety that renewed confidence might not follow.
ETF demand remained a critical support factor. Inflows on a weekly basis surpassed $880million, with increased trading activity displaying institutional interest for exposure. That said, analysts expressed, the sustainability of inflows will dictate if investors will absorb weakening spot momentum on volatility.
Derivatives Activity Stays Elevated but Fragile
In derivatives markets, open interest expanded sharply, moving past historical extremes before a strong wave of deleveraging reset exposure. Despite the correction, funding rates stayed positive, reflecting that traders continued to pay premiums for long positioning. Yet, conviction appeared weaker as leverage became more vulnerable to sell-side pressure.
Perpetual CVD signaled increased aggression from sellers, as participants unwound leveraged bets. This suggested that near-term market stability could be challenged unless stronger support for long exposure returns. The balance between buyer interest and rising risk from liquidations remains pivotal.
Options trading also intensified, with open interest climbing beyond previous peaks.Volatility spreads widened, signaling increased hedging as well as speculative demand. Meanwhile, the 25-delta skew stayed positive to register ongoing demand for protection on the downside under uncertain market conditions.
On-Chain Weakness and Profit-Taking Pressures
On-chain metrics showed weakening participation, with user activity and fee volumes declining from prior highs. Despite this, entity-adjusted transfer volumes spiked, reflecting robust capital flows likely tied to heightened volatility during the retreat. Realized capital flows, however, slowed, signaling less aggressive long-term accumulation.
Holder distribution stayed relatively stable, with modest shifts toward short-term ownership. Long-term holders maintained the majority of supply, though short-term activity indicated some rotation as traders adjusted to rapid price changes. This stability suggested that larger investors were not yet driving the pullback.
Profitability remained elevated, with 96% of supply in profit and the Realized Profit/Loss Ratio at 2.4. While these levels fell short of prior euphoric phases, they highlighted rising profit-taking behavior. With widespread profitability, the market faces ongoing pressure as participants secure gains, leaving recovery dependent on sustained institutional demand and renewed conviction across spot and derivatives.
