Bitcoin (BTC) continues to face downward pressure as weakening investor conviction and falling trading volumes weigh on market sentiment. Despite a brief uptick above $110,000 in the past 24 hours, both spot and derivatives markets point to a growing bearish trend.
Weaker participation signals cautious investor behavior
According to on-chain analytics firm Glassnode, Bitcoin’s recent consolidation around $110,000 reflects mounting bearish pressure. The firm noted in its Monday report that BTC’s Relative Strength Index (RSI) dropped from 37.4 to 33.6 last week, pushing into oversold territory and signaling increased selling pressure.
Spot trading volumes also declined nearly 9% to $7.7 billion, underscoring reduced investor participation. Glassnode analysts highlighted that “lower volumes during price moves often reflect weaker conviction or bias behind the recent trend, pointing to uncertainty in market sentiment.”
The trend extends to derivatives markets as well, with Bitcoin futures and options open interest slipping, suggesting a shift toward risk-off positioning following BTC’s pullback from recent highs.
Short-term holders dominate as market volatility rises
Glassnode also reported an increase in the influence of short-term holders (STHs), with the STH-to-LTH supply ratio climbing from 17.0% to 17.7%. This shift often signals greater volatility, as STHs are typically more prone to speculative trading and rapid profit-taking.
Despite these bearish signals, inflows into U.S. spot Bitcoin ETFs and corporate treasuries provided a counterbalance. ETF activity reversed close to $1 billion in prior outflows, registering $396 million in inflows last week, reflecting sustained institutional interest.
Analysts say cycle top is still ahead
CryptoQuant analyst Carmelo Alemán downplayed concerns of a cycle peak, suggesting the current pullback is consistent with corrections observed in previous Bitcoin bull markets. “Prior cycles have seen significant retracements before new highs,” Alemán noted, adding that institutional adoption and tokenization trends may support prices in the months ahead.
Key on-chain metrics also point to continued growth potential. Alemán highlighted that Bitcoin’s Network Value to Transaction (NVT) ratio has remained below 50 since July 7, a sign of strong network activity. Meanwhile, the Market Value to Realized Value (MVRV) indicator has yet to reach levels historically associated with overheated conditions.
Outlook
Bitcoin was last trading at $110,300 in the early Asian session on Tuesday, recovering from an intraday dip near $107,000. While bearish pressures remain elevated, analysts suggest the broader cycle has not yet topped, leaving room for renewed upside if institutional demand persists.
