- Bitcoin has gone through the $107K cost basis of short-term holders, an essential support level that has dictated the near-term sentiment market interaction between buyers and sellers.
- Derivatives markets indicated a conservative stance, where the use of leverage was lowered, the activity was cautious, and the interest for protection against a price decrease was elevated.
- ETF inflows offered limited support, while on-chain data revealed weak grassroots activity and reduced profitability across the broader market.
Short-term holder cost basis, a level historically viewed as a dividing line between buyers and sellers. Current data from spot, futures, ETF, and on-chain activity indicates fragile sentiment and defensive positioning.
Spot Market Struggles at Critical Support
Glassnode reported that Bitcoin is now sitting at the cost basis of short-term holders, a level often shaping near-term sentiment. The spot market showed weakness as momentum indicators slipped, with the relative strength index falling into oversold territory. Spot trading volumes also declined, reflecting hesitation from active participants.
Cumulative volume delta on spot markets suggested easing sell pressure, signaling some stabilization. However, the broader picture remains fragile as demand failed to strengthen. Weakness in volumes and engagement confirms that conviction is limited among traders as Bitcoin holds this critical level.
With the price moving further from its all-time high, Bitcoin remains vulnerable. Whether buyers defend the short-term holder cost basis or sellers push lower will be decisive for near-term direction.
Futures and Options Reflect Defensive Sentiment
The futures market revealed a cautious stance as open interest contracted further and funding rates slipped. Reduced leverage usage suggests traders are limiting exposure, positioning defensively after recent volatility. Slight improvements in perpetual cumulative volume delta showed less aggressive selling but no strong signs of renewed buying.
Options markets echoed this cautious behavior.Open interest shrank and volatility spreads tightened, indicating a drop in overall participation. Nevertheless, the 25-delta skew shot up past its past readings, revealing that traders were eagerly buying puts for protection against a market fall.
Together, these trends indicate that traders remain defensive across derivatives. The preference for hedging strategies over directional bets reinforces market fragility as Bitcoin holds its cost basis support.
ETFs and On-Chain Activity Signal Cooling Conviction
Flows through U.S. spot ETFs shifted back into net inflows, offering some short-term support. Yet trading volumes contracted while market value-to-realized value ratios declined, showing cautious profit-taking behavior. Institutional interest is present but appears more selective following recent price weakness.
On-chain data added to concerns of cooling conviction. Active addresses and fees stayed muted, suggesting limited grassroots participation. At the same time, transfer volumes spiked as large entities repositioned holdings during volatility, highlighting tactical rather than organic demand.
Profitability metrics also weakened. Supply in profit decreased, while the net unrealized profit/loss metric approached loss territory. Realized profit and loss settled near equilibrium, reflecting reduced unrealized gains. These developments emphasize that sentiment remains fragile despite selective inflows.
