Price action has calmed, but the rebound isn’t supported by strong crypto-specific catalysts and remains fragile. Here’s what the options market is signaling beneath the surface. OI: Call-Leaning Positioning

Despite BTC trading quietly, options open interest remains dominated by calls. The put-call ratio has dropped sharply over the past two weeks, signaling traders still want exposure to a potential year-end upside move.
glassno.de/49UDOSD

Illiquid $BTC supply has started to decline, with roughly 62,000 BTC moving out of long-term, inactive wallets since mid-October. When illiquid supply falls, more coins are available to trade, which can make it harder for price to trend without strong new demand. Illiquid supply has been a major tailwind this cycle, but the latest pullback breaks that trend. Similar declines have historically cooled momentum as supply returns to market, and we’ve seen far bigger outflows before, like the 400K BTC in Jan ‘24.

#Bitcoin ETF inflows dropped 80% last week.

But derivatives positioning remains elevated and on-chain data shows nearly all $BTC supply is still in profit.

This week’s Market Pulse unpacks the shifting balance of conviction across market participants: glassno.de/4l0As2f


Off-chain indicators remain mixed:

• RSI dropped sharply to 51.7 - momentum fading
• Spot CVD improved, hinting at dip-buying
• Futures OI remains elevated at $45.6B
• ETF flows dropped 80% - caution among TradFi

Has $BTC topped? Not quite. In this follow-up to the recent analysis by @swissblock__, we present 5 additional data points that help map where we are in the cycle and why caution is warranted in the short term:

https://twitter.com/swissblock__/status/1945073353972163002

The recent rally to $122k has pushed #Bitcoin close to 1 standard deviation above the short-term holder cost basis. If this momentum continues, the next key level is $136k (2 +std), a zone that has historically marked elevated profit-taking and local market peaks.

$BTC declined nearly 5% as $3.5B in realized profits were taken. The 14 July edition of Market Pulse anticipated this risk.

By combining on-chain and off-chain indicators, we provide forward-looking context.

Here’s what signaled caution: 🧵👇 "The Percent Supply in Profit [...] is notably above the high band [...]. Such a scenario could lead to heightened sell-side pressure as investors may opt to realize gains."

The investors’ spending behaviour in the #Bitcoin ecosystem, is far from random - it follows a predictable power-law decay. Our latest research uncovers how the age of coins directly influences their likelihood of being spent. 🧵 Our statistical analysis shows, for every tenfold increase in holding time, the probability of spending drops by a factor of 10. This trend holds consistently, revealing tenacious behavioral patterns that help investors understand and anticipate market dynamics with greater confidence.

Cyclical long-term holders, excluding the ultra long-term holders (>7y), now hold less than 50% of #Bitcoin’s supply, down from over 60% earlier this year. How much runway remains? Realized Cap HODL Waves provide the granularity needed to assess where we are in the cycle: glassno.de/41sPMie $BTC market cycles traditionally follow a progression: early in the cycle, long-term holders dominate. By the peak, short-term holders (new investors) often hold over 70%-80% of wealth.

#BTC briefly advanced above the historic $100K level but the move was short-lived. Where will the retracement stop? Glassnode’s new Cost Basis Distribution (CBD) metric offers #onchain insights into accumulation and distribution patterns to help spot critical price levels. 🧵👇 CBD is a heatmap that shows the total #Bitcoin supply grouped by the average cost basis of investors at specific price levels. By visualizing where cost bases are concentrated, CBD helps identify key zones of support and resistance based on investor behavior.

Things are getting heated! #Bitcoin long-term holders (LTHs) have come out in force, with selling pressure hitting -366K #BTC/month - the highest since April 2024. But who is actually selling? Let’s dig deeper:
🧵👇 glassno.de/4fJoWGC Among LTHs, the 6m-12m cohort led the charge, spending an average of 25.6K BTC/day in profits. Most of the recent selling activity came from this specific group of investors: glassno.de/3CF66lA

Following the SECs 13 civil charges against the leading cryptocurrency Exchange Binance, the Exchange experienced a net outflow of -10.5K BTC, with only 11 trading days recording larger outflows.

However, the current value remains a significant -29.8K BTC (-74%) smaller than the… twitter.com/i/web/status/1… When assessing the net outflow in USD terms, we note a value of -$277M, the 15th largest on record. Again, when comparing this to the peak net outflow of $1.04B, the current value remains -$763M (-73%) smaller.

Dominance of #Bitcoin supply has seen a dramatic shift over the last two years.

US entities are now holding 11% less $BTC than they were in June 2022, whilst investors active during Asian trading hours have picked up 9.9%.

This is a distinct reversal from the 2020-21 bull cycle We can see major shifts underway in stablecoins, with #USDT supply at new ATHs, whilst #USDC and #BUSD fall to multi-year lows.

Given stablecoins are non-interest-bearing, and regulatory pressure in US is building, it suggests US capital is now less active in digital assets.

The past week has witnessed a series of significant governance proposals 📜 and votes 🗳️ by major players within the DeFi space, including Lido, Maker and UniSwap.

What are the economic implications of these decisions and the future course for these protocols?

A thread🧵 twitter.com/i/web/status/1… On May 15th, LidoDAO successfully passed a governance proposal, leading to the launch of Lido V2. This upgrade introduces stake withdrawals and a staking router, a modular infrastructure for validator pools.

Now, new nodes can be registered with Lido in a permissionless manner,… twitter.com/i/web/status/1…

On May 11th and 12th, the #Ethereum network experienced two occasions where over 60% of the validators stopped performing their duties, causing a loss in Finality.

Finality refers to the state where a supermajority of validators (2/3 of the total stake) have attested to the… twitter.com/i/web/status/1… With up to 60% of validators offline and absent in consensus responsibilities, the performance of the chain was degraded. About 3.68% of daily slots were missed and 253 blocks not proposed on time. This remains significantly lower than the 658 blocks missed across the Shapella… twitter.com/i/web/status/1…

#Bitcoin daily transaction counts are approaching All-time-highs, seeing an explosive uptick in 2023.

With the emergence of Inscriptions, analysts now need to assess how much of this is driven by Inscriptions vs monetary transfers.

A quick 🧵 to explore
glassno.de/41PQYtj We start with our #Bitcoin mempool, where we see a marked character shift this year.

The sharp fee pressure spike during FTX stands out, as does the sustained fee pressure in 2023.

These plateaus are aligned with three waves of Inscriptions, as people rushed to get in under 1M

#Bitcoin block 787,500 will be mined shortly, which means we're ~1yr from the next halving event

We have also released a new dashboard exploring the tremendous growth of #Bitcoin over each halving epoch

📊 glassno.de/3oIIpSc

A quick 🧵covering BTC growth by halving cycle. The extraordinary trajectory of #Bitcoin requires a log scale to visualize properly

Each of the following charts are indexed to 100 on the halving, to display performance over each halving epoch

$BTC Market Cap growth remains explosive
1️⃣: 470x
2️⃣: 80x
3️⃣: 16x
4️⃣: 2.5x (so far)

The topic of #Bitcoin supply concentration is a favourite for critics of the asset.

In our latest research piece, we explore how the smallest HODLers of $BTC, the Shrimp (< 1 $BTC) 🦐 and Crab (< 10 $BTC)🦀 are in fact last cycles largest accumulators.

insights.glassnode.com/bitcoin-supply… We revisit our prior research, and compare the change in #Bitcoin wallets over the course of the 2021-23 cycle.

What we find is that small entities, with < 50 $BTC have absorbed the largest volume of coins, sourced from Whales, Miners and Exchanges.

insights.glassnode.com/bitcoin-supply…

#Bitcoin MVRV Ratio is one of the most popular and widely used on-chain metrics.

However, much of the power of MVRV is rarely put to use.

The MVRV can be supercharged, and used to find cycle extremes, market trends, and for early warning of cycle peaks.

glassno.de/3SkFFW0 We start the piece with the basics, exploring the fundamentals of #Bitcoin MVRV, and what makes it tick.

Next we quantify the proportion of trading days above or below, to help define extreme values, and assign probabilities to these key levels.

📊 glassno.de/41vFjQC

Navigating a #Bitcoin bear is hard work, and there are no silver bullets, nor single metrics that tell us when it ends.

In our latest analysis, we cover ten on-chain indicators that can help us identify the turning of the market tides.

insights.glassnode.com/ten-indicators… In this piece, we present ten #Bitcoin indicators, across several on-chain concepts, which can be used to identify confluence, and market strength.

What we are seeking is a positive shift in network activity, and $BTC holder psychology, back towards more positive sentiment.

Following the collapse of FTX, #Bitcoin investors have been withdrawing coins to self-custody at a historic rate of 106k $BTC/month.

This compares with only three other times:
- Apr 2020
- Nov 2020
- June-July 2022

glassno.de/3g3mt0i This has resulted in positive balance changes across all wallet cohorts, from shrimp to whales.

The failure of FTX has created a very distinct change in #Bitcoin holder behaviour across all cohorts.

With the recent collapse of the #FTX exchange, we have undertaken studies to assess the scale and relationship of on-chain flows over the last 1yr.

The following thread covers 🧵
- Fund flows between #FTX, #Alameda, #Binance
- The complete decline of #FTX exchange reserves Over the last year, since the market ATH, #Ethereum wallets associated with #Alameda Research have primarily interacted with two entities, weighted by all token USD value transferred:

- FTX = ~90%
- Binance = ~9%
- Other = ~1%

The last 48hrs have seen a series of dramatic events unfold related to FTX and Binance exchanges

In response, we have seen #Bitcoin aSOPR drop to 0.9, signalling the average spender was realizing a 10% loss.

This is as severe as June sell-off, when prices first fell to $17.5k. On a net USD basis, this equates to just over $1B in #Bitcoin net losses in a single day.

Whilst this is a significant sum, it is certainly not the largest, with the 14-June sell-off hitting over $4.2B in losses, the largest in this cycle.