Spot, derivatives, and on-chain data point to defensive trading as investors brace for potential market turbulence.
Bitcoin (BTC) briefly touched the $85,000 mark last week before retreating, as market indicators suggest investors are approaching trading with caution.
According to Glassnode’s weekly Market Pulse report, spot, derivatives, and on-chain metrics collectively point to a more defensive market environment.
Spot and Derivatives Markets Show Caution
In the spot market, net buying activity weakened sharply.
The cumulative volume delta (CVD), which measures the difference between buying and selling pressure, turned sharply negative, dropping from +$54.2 million to -$194.2 million (-458.6%), signaling sell-side dominance.
Netflows also shifted into significant outflows, reflecting lower institutional demand and fading confidence in near-term upside continuation.
Source: Glassnode
Derivatives markets tell a similar story. Futures open interest eased by 5%, suggesting traders are modestly de-leveraging.
Meanwhile, long funding rates surged from $758.4K to $1.7 million (119%), showing continued bullish positioning, even as perpetual CVD data highlights defensive behavior among leveraged traders.
On-Chain Activity and Options Insights
Blockchain activity reinforces the cautious market sentiment. Active addresses fell by nearly 5%, dipping below statistical lows, while transaction volumes dropped slightly (1.5%), hovering near the lower end of recent ranges.
Network fees stayed subdued, and the share of supply in profit declined as realized losses increased, suggesting many participants are taking profits or cutting losses.
Options market data shows moderate caution. Open interest decreased slightly ($0.3 billion), volatility spreads stayed above realized volatility, and the 25-delta skew jumped from 5.94% to 10.77%, reflecting heightened demand for downside hedging.
Glassnode report notes that this combination of signals points to a fragile market environment. Short-term stabilization will depend on renewed buying interest and reduced selling pressure, highlighting the need for careful risk awareness among investors.
Why This Matters
Defensive signals across crypto markets suggest investors may face heightened volatility and cautious trading in the weeks ahead.
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