TL;DR
- Glassnode points to multiple technical and on-chain indicators that signal a defensive crypto market phase.
- Bitcoin’s recent drop is seen by analysts as a rapid “market cleanup” that flushed out weaker players.
- Despite short-term fear, long-term holders (LTH) continue to accumulate Bitcoin, as shown by the Realized Cap.
Digital assets are going through a defensive crypto market phase, as confirmed by the on-chain analysis firm Glassnode. This new risk-averse stance comes after an abrupt and “ruthless” drop in Bitcoin’s price, which plummeted from $115,000 to $104,000 in just four days.
This movement, described by analysts as a “swift and deep market cleanup,” has shaken investors and eroded short-term confidence, expelling players with weaker positions. Glassnode emphasizes that multiple key indicators reflect this change in sentiment.
The Relative Strength Index (RSI) remains in a weak zone after briefly breaking its lower band. In parallel, the cumulative volume delta (CVD) remains negative, indicating sustained selling pressure. The analysis firm also highlights that purchase volumes in the spot market fell during the drop, a clear sign of soft demand from buyers.
On-Chain Metrics Reveal Growing Stress
Glassnode’s analysis delves into the stress signals defining the current defensive crypto market phase. Both open interest in the derivatives markets and funding rates have decreased, reflecting a lower willingness to take on risky leveraged positions.
Perhaps the most telling indicator is the drastic increase in the 25-Delta Skew of the options market. This spike shows a growing demand for downside protection (puts), demonstrating that institutional investors and more sophisticated traders are actively hedging their portfolios against the possibility of further drops.
Other profitability indicators, such as NUPL (Net Unrealized Profit/Loss), have turned negative, and the RPL (Realized Profit/Loss) has fallen below previous lows. Both are symptoms of growing financial stress among coin holders.
However, not all signals are bearish. The Realized Cap continues its ascent. This suggests that, despite the short-term panic, long-term investors (LTH) are taking advantage of the weakness to accumulate Bitcoin discreetly.
Glassnode concludes that while the recent rebound is encouraging, the market remains fragile. Confidence must return before bullish momentum can resume. Tension is building on-chain, and the market is approaching an inflection point that could define the next major breakout or breakdown.
