Analytics Firm Glassnode Issues Bitcoin Alert, Says Retail Participation Softening and Demand Slowing

Crypto analytics platform Glassnode says the Bitcoin (BTC) market has entered a “cooling phase” after the price of the flagship digital asset failed to consolidate above the $111,000 level.

According to Glassnode, the market is witnessing “softening retail participation and a retreat from aggressive buying” amid the Spot Cumulative Volume Delta (CVD), a technical indicator, turning bearish.

The Spot CVD is used to determine the buying and selling pressure in the spot market in real-time, with a rise indicating bullish sentiment while a fall suggests a bearish sentiment.

Explains Glassnode,

“Spot market signals weakened across the board, momentum fell back toward neutral, spot CVD turned sharply negative, and volume dipped below the statistical low band…

…the sharp reversal in perpetual CVD suggests short-term traders may be trimming risk.”

While there was a sharp rise in inflows to spot Bitcoin exchange-traded funds (ETFs), Glassnode says there was subdued organic on-chain activity as evidenced by falling fees, no growth in active addresses and only a moderate transfer volume.

“ETF flows rose sharply, reaffirming institutional demand, though trade volume declined, showing more passive accumulation than active trading.”

According to Glassnode, close to 97% of the Bitcoin supply is currently sitting at a profit, and this presents a risk of a sell-off if the demand for the crypto king remains subdued.

“Without renewed demand from both retail and institutional investors, the current cooling momentum may persist.”

Bitcoin is trading at $104,457 at time of writing, down by around 7% from the all-time high price of $111,800.

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