Bitcoin (BTC) Faces Limited Momentum Amid On-Chain Activity Slowdown

Bitcoin (BTC) is experiencing limited upward momentum as it continues to trade within the $100,000 to $110,000 range, according to Glassnode Insights. Despite maintaining its $99,000 support level, a reduction in spot trading volume and cautious sentiment in futures markets suggest that further upward movement may be constrained unless there is a notable influx of demand.

Market Volatility and Key Support Levels

Recent geopolitical tensions caused Bitcoin to temporarily dip to $99,000, testing the support level near the average purchase price of short-term holders at $98,200. However, reports of easing tensions allowed Bitcoin to rebound to $106,000. Currently, Bitcoin has returned to a consolidation phase within the $100,000 to $110,000 corridor, a pattern observed since early May.

Analysis of the Cost Basis Distribution (CBD) Heatmap indicates that when Bitcoin fell to $99,000, it found support at the upper end of the $93,000 to $100,000 range. This price band, significant since the first quarter of 2025, remains a crucial structural support. If prices stay above this range, the medium-term bullish trend remains intact. However, a breach could trigger sell-offs from investors who entered at these levels, increasing downward pressure.

Futures Market Dynamics

The weekend’s volatility led to significant liquidations in the futures market, with $28.6 million in long positions and $25.2 million in short positions being liquidated. This highlights how quickly market sentiment can reverse based on news. During the same period, open interest in BTC futures decreased by 7%, from 360,000 BTC to 334,000 BTC, indicating a reshuffling of speculative positions.

Despite Bitcoin’s recovery to the $100,000-$110,000 range, profit-taking and on-chain activity have shown signs of cooling. Such patterns are typical of consolidation phases where volatility subsides and investor participation wanes. If this trend continues, the potential for surpassing all-time highs may be limited, as the market digests previous gains while awaiting new momentum and demand influx.

Profit-Taking and Activity Decline

To assess investor profit-taking trends, a comparison of the 30-day moving average of realized profits and cumulative profits during previous bull markets was conducted. During the 2020-2022 market, investors realized approximately $550 billion in profits through multiple rallies, including two significant upswings. In the current cycle, profit realization has already reached $650 billion, surpassing previous totals.

After the third major profit-taking phase, the market is cooling down as realized profits gradually decrease, indicating a decline in market fervor. Additionally, on-chain transfer volume’s 7-day moving average has dropped by about 32%, from $76 billion in late May to $52 billion over the recent weekend.

Unlike the record rallies of Q2 and Q4 2024, the recent attempt to breach $111,000 has not been accompanied by a surge in spot trading volume, which remains at $7.7 billion, significantly lower than previous peaks. This discrepancy suggests a weakening of speculative interest as the market adopts a wait-and-see approach.

Futures Market Caution

While futures market participation remains active, with traders engaging up to the $111,000 breakout attempt, the aggressive positioning seen earlier in 2025 is softening. Funding rates (annualized) and the 3-month futures basis continue to decline, indicating a cautious sentiment among traders. This trend suggests increasing prudence in speculative activities, with potential growth in cash-and-carry arbitrage positions or an expansion of short positions.

In conclusion, Bitcoin is currently navigating a range-bound market influenced by macroeconomic news, with strong support between $93,000 and $100,000. However, signs of market fatigue are becoming apparent, with reduced profit-taking, slowing on-chain activity, and lackluster spot trading volume accompanying recent attempts to reach new highs. As long as prices hold above key support levels, the bullish trend remains, but the potential for new all-time highs is limited without a recovery in demand and investor sentiment.

For more in-depth analysis, visit Glassnode Insights.

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