Bitcoin has encountered significant resistance at the $94,000 mark, prompting a decline towards the $87,000 range, as detailed in a recent report by Glassnode. This setback has reversed the recent bullish momentum, leading to a more defensive market sentiment.
The 14-day Relative Strength Index (RSI) has shown substantial weakening, retreating towards neutral levels. Concurrently, conditions in the spot market have deteriorated, with the spot Cumulative Volume Delta (CVD) plunging into negative territory, indicating heightened sell-side activity. Furthermore, spot trading volumes are compressing toward lower statistical bands, which suggests a decline in liquidity and conviction regarding price movements.
In the derivatives sector, futures open interest has decreased slightly, implying a trend of light de-risking rather than a complete capitulation of positions. Additionally, the perpetual CVD has fallen below its lower range, reflecting persistent sell pressure. Despite the recent market downturn, funding rates have risen, suggesting that long positions remain active but may be at risk if market weakness continues.
The options market remains engaged, characterized by stable open interest and significant negative volatility spreads, which indicates ongoing demand for downside protection among investors.
On-chain data presents a mixed outlook. While active addresses have seen a slight decline, entity-adjusted transfer volume has surged above its upper limits, indicating increased capital movement. Pressure on fees has diminished, pointing to a reduced demand for block space. Capital flow indicators are fragile, with Realized Cap Change remaining subdued. Additionally, supply dynamics are influenced by short-term holders and a heightened share of hot capital, which increases sensitivity to market fluctuations.
ETF flows have offered some support, with net inflows rebounding robustly despite lower trading volumes. However, the ETF Market Value to Realized Value (MVRV) ratio has decreased slightly, and profit metrics remain subdued, suggesting a cautious rather than overly optimistic market positioning.
In conclusion, Bitcoin”s rejection at the $94,000 resistance level underscores a risk-off market environment driven by consolidation. While some indicators signal underlying activity and institutional interest, the overall market conviction remains uneven. This situation leaves the cryptocurrency susceptible to further declines or extended periods of sideways trading until stronger demand surfaces.
