According to the latest report from Glassnode, Bitcoin has commenced Q1 2026 on a more stable footing following a major price correction that occurred in October 2025. Currently, Bitcoin is trading approximately 29% below its previous peak of over $125,000, with the market consolidating around significant levels.
The macroeconomic backdrop appears supportive for Bitcoin, with inflation reported at a contained 2.7% in the December Consumer Price Index (CPI) figures. Furthermore, real Gross Domestic Product (GDP) growth for the last quarter of 2025 was robust at 5.3%. Market expectations for two potential rate cuts, reflected in Fed funds futures, continue to provide a favorable environment for risk assets, including Bitcoin.
Nevertheless, the labor market has shown signs of cooling. Job creation in the United States has significantly slowed in 2025. While advancements in productivity driven by artificial intelligence have partially contributed to this trend, any further deterioration in labor market conditions could prompt a more cautious approach from investors.
On the market structure front, Bitcoin”s dominance has proven resilient, rising to 59% in the fourth quarter of 2025, even as mid-cap and small-cap altcoins faced challenges maintaining their earlier gains. This stability in dominance has occurred amid a broader deleveraging phase in perpetual futures markets. Notably, the open interest in Bitcoin options has surpassed that of perpetual futures, indicating an increasing demand for downside protection rather than speculative positions. The positive 25-delta put-call skew across various expirations further emphasizes this defensive market sentiment.
From an on-chain analysis perspective, the entity-adjusted Net Unrealized Profit/Loss (NUPL) metric has revealed a shift in sentiment from “Belief” to “Anxiety” following the selloff in October. This level of sentiment is historically more indicative of late-cycle consolidation rather than outright market capitulation. Additionally, the dynamics of Bitcoin supply have shifted, with a notable 37% increase in the supply of Bitcoin active within the last three months during Q4, while the supply of dormant coins for over a year has only declined by 2%. This uptick in short-term activity suggests a heightened distribution velocity, often seen when long-term holders reduce their exposure amidst market strength.
Key metrics such as realized price and Market Value to Realized Value (MVRV) ratios offer further insights. The report indicates a significant decline in the percentage of Bitcoin supply held in profit, highlighting the $80,000 to $85,000 price range as a potential accumulation zone for systematic investment strategies. Moreover, the “Puell Multiple” has dipped to 0.9, suggesting that miner revenues have only slightly fallen below their historical annual averages, signaling tighter profit margins rather than distress. The growth in stablecoin supply and transaction volumes remains positive, although forward-looking indicators hint at potential tightening beyond Q1.
In summary, Glassnode”s report illustrates that while the market appears healthier, there is an increasing selectiveness in risk appetite. Bitcoin continues to attract defensive positioning compared to altcoins, yet its price trajectory remains contingent on liquidity trends, macroeconomic stability, and whether the current distribution pressure will lead to renewed accumulation efforts.
