Blockchain data analysis agency Glassnode pointed out in its weekly chain report released on Tuesday (27) that while Bitcoin (BTC) on-chain activity and the perpetual futures market are in balance, investor speculative interest is weakening.
The report highlights a decrease in profit and loss realization activity in the market, with perpetual contract funding rates returning to neutral levels, indicating a significant reduction in speculative interest among market participants, regardless of investment vehicle or cryptocurrency. Additionally, perpetual contract liquidations have been significantly lower compared to the euphoria surrounding Marchâs all-time highs, further supporting the idea of ââreduced speculative interest and signaling a preference for a market that is more focused on spot trading.
Glassnode also noted that net capital inflows into Bitcoin have slowed in recent months, showing a balance between investors taking profits and realizing losses. Daily net realized gains and losses now stand at more than $15 million, significantly lower than the $3.6 billion in daily inflows when the market hit a record high of $73,000 in March, the report showed. Glassnode notes that the indicator typically returns to neutral levels as markets approach inflection points, which could be the continuation of a market trend or turn into a macro-scale bear trend.
Bitcoin realized net profit/net loss, source: Glassnode
Additionally, the market-to-realized value ratio (MVRV), which measures investors' average unrealized profits, tested its historical average of 1.72 over the past two weeks, a level that historically marks the turning point between macro bull and bear trends.
Bitcoin MVRV Deviation Bands (MVRV Deviation Bands), source: Glassnode
Notably, some of the new investors became long-term investors after the price reached new highs, and the sideways moves in recent months have tested their confidence. [Note: Glassnode considers addresses that hold Bitcoin for more than 155 days as long-term holders (HODLER)]
âHistorically, supply in the 3- to 6-month age band tends to peak shortly after major market highs are established, often during the subsequent rollback process. Some of these new investors will Those who decided to HODL during the shock eventually became long-term investors, while many others chose to exit their positions and realize losses. "Currently, 3- to 6-month-old coins account for 12.5% ââof the circulating supply," Glassnode's report reads. Above, the structure is similar to the sell-off in mid-2021, but also to the peak of the 2018 bear market.â
Bitcoin hoarding fluctuation chart (3 to 6 months old currency holders), source: Glassnode
Glassnode concluded that a large number of coins are now showing neutral funding rates, indicating that speculative interest across the crypto market has reset and that recent price movements may be driven by the spot market. The market has been running in a structurally orderly downward trend for more than 5 months. Based on historical experience, Glassnode believes that this calm and stable market structure usually does not last long and often indicates that market volatility may follow. intensified.
Source: CryptoSlate, Glassnode
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