Felix Pinkston
Sep 29, 2025 13:11
Bitcoin trades above short-term holder cost basis, but market momentum softens. Derivatives show caution, and on-chain activity declines, signaling potential transition.
Bitcoin (BTC) recently traded above the cost basis for short-term holders, with price movements hovering around the $111,000 mark. Despite this, market momentum has shown signs of weakening as indicated by a decline in the 14-day Relative Strength Index (RSI) and reduced net selling pressure, according to Glassnode.
Market Overview
Trading volumes have seen a significant increase, indicating heightened participation even as momentum appears to wane. This suggests that while demand persists, the market’s strength is beginning to show fatigue, potentially making it more susceptible to shifts in investor sentiment. The derivatives market has exhibited a more cautious approach, with a decline in futures open interest and funding rates suggesting a retreat in leverage and risk appetite among traders. Defensive positioning is evident, with a notable absence of aggressive long positions.
Conversely, the options market has seen increased activity, with a preference for downside protection as traders seek to hedge against potential declines. Despite firm volatility spreads indicating expectations for price fluctuations, there is a lack of strong directional conviction. Liquidity conditions remain stable, balancing speculative activities with a steady underlying market, yet the focus on protective measures indicates ongoing caution.
On-Chain Dynamics
On-chain profitability has decreased, shifting the market from a profit-dominant to a loss-dominant state. This shift suggests mounting stress, mirrored by fundamental indicators such as a decrease in active addresses and a drop in transaction fee volume, both pointing to reduced on-chain activity. Capital flows further reflect this caution, with a slowdown in realized cap inflows and long-term holder activity surpassing that of short-term participants.
Overall, the market seems to be in a transitional phase. While liquidity and participation remain steady, cooling momentum and risk appetite, coupled with weaker on-chain fundamentals, suggest a consolidating structure. Without the emergence of new demand, external factors may be necessary to alter the current balance and drive significant market movements.
For more detailed insights, visit the Glassnode article.
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