Analytical firm Glassnode has highlighted growing caution among investors following Bitcoin’s sharp decline from around $115,000 to $104,000. Market participants have been reducing risk exposure and realizing losses, signaling a shift toward defensive strategies.
Bitcoin Market Enters Defensive Phase
According to Glassnode, several on-chain and technical indicators point to a market prioritizing capital preservation over speculative gains. Experts described the recent drop—from $115,000 to a four-day low of $104,000—as a rapid market cleansing, which forced weaker hands to exit positions and triggered a defensive rotation across the crypto space.
Although Bitcoin’s price has since rebounded, sentiment remains cautious, with traders’ positioning reflecting continued prudence.
Key Market Signals
Glassnode highlighted several metrics demonstrating the defensive shift:
- RSI Index: Broke below support and partially recovered, yet still shows weakness.
- Cumulative Volume Delta: Remains negative, indicating persistent selling pressure.
- Spot Trading Volume: Fell during the decline, pointing to weak demand.
- Futures Open Interest and Funding Rates: Both decreased, reflecting lower speculative activity.
- Options Market: A rise in the 25 Delta Skew signals increased demand for downside protection strategies.
Collectively, these indicators suggest a market where participants are more focused on safeguarding capital than chasing directional profits.
Signs of Market Stress and Long-Term Accumulation
Glassnode analysts also noted stress indicators: the Net Unrealized Profit/Loss (NUPL) turned negative, and Realized PnL dropped below its previous minimum.
However, Realized Capitalization continues to grow, hinting at ongoing accumulation by long-term investors.
“Excess market positions have been cleared, defensive setups are in place, and positioning structure is cleaner. The rebound from recent lows is encouraging, but the overall market structure remains fragile. Until confidence is fully restored, caution is likely to prevail over conviction,” Glassnode summarized.
Previously, CryptoQuant noted that Bitcoin had entered the late stage of the bullish cycle, providing context to the recent volatility.
