Glassnode: Bitcoin Dips Below Key Cost Basis Levels, Indicating Demand Fatigue And Defensive Market Sentiment
In Brief
Bitcoin is trading below key cost basis levels, with long-term holders selling into strength and the options market turning defensive amid rising put demand and elevated volatility, signaling demand exhaustion and a cautious phase before potential recovery.
Platform for on-chain market intelligence, Glassnode published new cryptocurrency market analysis indicating that Bitcoin is trading below critical cost basis levels, suggesting diminishing momentum and signs of demand exhaustion.
According to the report, Bitcoin currently sits beneath the cost basis of short-term holders as well as the 0.85 quantile, reflecting market fatigue and raising the possibility of a prolonged consolidation phase if these levels continue to resist reclamation.
Since July, long-term holders have increased selling activity, distributing over 22,000 BTC per day, a trend that continues to apply downward pressure on price stability.
Options market data further highlight a cautious environment. Open interest has reached new highs, yet sentiment leans bearish, with traders favoring put options over call options.
Furthermore, the firm notes that Short-term rallies are frequently met with hedging strategies rather than sustained buying, while elevated implied volatility and realized volatility ending a prior low-volatility period amplify price swings. Dealers’ short gamma positioning contributes to more pronounced selloffs and tempers upward movements, reinforcing the subdued market behavior.
Both on-chain and derivatives metrics suggest that Bitcoin is in a transitional phase. The network has drifted away from its recent all-time highs, stabilizing below the short-term holders’ cost basis of approximately $113,100. Historically, this pattern often precedes mid-term bearish conditions as weaker participants capitulate.
The combination of diminishing inflows, long-term holder distribution, defensive options positioning, and structural fatigue points to a market that may require an extended consolidation period before renewed spot demand and reduced volatility can support a sustainable recovery, Glassnode concluded.
Bitcoin Climbs To $109K Amid Mixed ETF Flows
At the time of writing, Bitcoin is trading at $109,136, reflecting a 1.05% increase over the past 24 hours, with a low of $106,793 and a high of $110,291. The total cryptocurrency market capitalization stands at $3.68 trillion, up 0.67% over the same period. Daily trading volume across the crypto market reached $180.98 billion, representing a 21.23% decline, according to CoinMarketCap data.
Meanwhile, SoSoValue reports that Bitcoin spot ETFs experienced a net outflow of $101 million yesterday, marking outflows on three of the past four trading days, although strong inflows on Tuesday have maintained an overall positive net flow for the week.
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About The Author
Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
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Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
