Following the recent collapse of Bitcoin from approximately $115,000 to $104,000, the cryptocurrency market has entered a protective phase, with investors becoming significantly more cautious. This is indicated by analysts at Glassnode, who noted that market participants are reducing risks and locking in losses in response to the decline of the leading cryptocurrency.
This is reported by Business • Media
Market Cleansing and Cautious Sentiments
Glassnode experts described the Bitcoin drop over four days as a “swift and decisive market cleansing,” which led to the exit of weaker players and stimulated the formation of protective strategies among traders. Although the price has partially recovered after the drop, tension is still palpable in the market: traders are refraining from active actions and focusing on capital preservation.
“The market excess has been eliminated, protective positions have been formed, and the positioning structure has become cleaner. The bounce from the lows is a hopeful signal; however, the market structure remains fragile. Until confidence is restored, the market is likely to remain more cautious than convinced,” summarized Glassnode.
Technical and On-Chain Metrics Indicate Tension
Glassnode analysts examined key indicators of the current situation. The Relative Strength Index (RSI) reached its lower boundary after the drop and has partially recovered, but remains in a zone of weakness. The cumulative delta of trading volume is still negative, indicating ongoing selling pressure.
During the collapse, spot volumes also decreased, signaling weak demand for Bitcoin. At the same time, open interest in futures contracts has shrunk, and funding rates have fallen. In the options market, experts noted an increase in the 25 Delta Skew — a sign of heightened demand for protective strategies against further declines.
Overall, according to Glassnode’s estimates, the market is in a state where the primary goal of traders is to preserve capital rather than maximize profits. Medium-term uncertainty persists, and key indicators suggest the presence of stress: the ratio of unrealized profit to loss (NUPL) has turned negative, and realized profit/loss has dropped to a new low.
At the same time, despite the tension, the Realized Capital is showing growth. This may indicate that long-term investors continue to accumulate Bitcoin, hoping for a market recovery.
Earlier, analysts at CryptoQuant noted that Bitcoin has entered the late phase of a bullish cycle.