Bitcoin’s price has dipped below $111,000, leading analysts at Glassnode to declare a market “cooling phase.” This downturn is marked by a significant shift in market sentiment.
Retail Investors Retreat
Glassnode reports weakening retail participation and a decrease in aggressive buying. A key indicator, the Spot Cumulative Volume Delta (CVD), has turned bearish, signaling less buying pressure in the market. The firm notes a drop in overall trading volume and a shift towards neutral momentum. Short-term traders seem to be reducing their risk, further supporting this cooling trend.
Institutional Interest Remains, But Activity is Slow
While institutional investors show continued interest, as evidenced by increased inflows into Bitcoin ETFs, overall on-chain activity remains subdued. This is reflected in lower transaction fees, a stagnant number of active addresses, and only moderate transfer volume. Glassnode describes this as “passive accumulation” rather than active trading.
High Profit Levels Pose a Risk
A significant portion (around 97%) of Bitcoin’s supply is currently profitable. This creates a potential risk: if demand doesn’t pick up from both retail and institutional investors, these holders might sell, leading to further price drops. Without renewed buying pressure, the current cooling trend could continue.
The Bottom Line
Bitcoin is currently trading around $104,457, a roughly 7% drop from its all-time high. The market’s cooling phase is largely attributed to reduced retail participation and a lack of significant buying pressure, despite sustained institutional interest. The situation warrants close monitoring.