- Bitcoin rebounds to $121k after testing $114k support but volume drops 22%
- ETF MVRV hits 2.43 above the high band, indicating potential profit-taking risk
- Active addresses surge to 793k while 94.1% of supply remains profitable
Bitcoin has recovered from its sharp retest below $114k, climbing back toward $121k as market conditions show mixed signals for future price action.
The rebound brought renewed activity across several trading sectors. However, a recent Glassnode report takes us through underlying metrics that reveal cautionary signs.
The spot market recovery saw RSI increase from 41.5 to 47.5, bouncing from oversold territory, while Spot Cumulative Volume Delta improved from heavy selling pressure to near-neutral levels. Check our latest Bitcoin prediction to see how these signals could shape the next move.
Trading volume declined 22% to $5.7B. This means that the price recovery lacks the overall market participation needed for bullish price action.
Bitcoin Futures and Options Markets Show Diverging Trends
Futures Open Interest eased to $44.1B with long-side funding remaining elevated despite small declines.
Perpetual CVD reached a peak of -$0.2B, indicating leveraged traders wanting to purchase the rally and become more buy-side aggressive.
Participation in the options market increased as Open Interest rebounded 6.7% to $42.4B. Volatility spread tightened aggressively to 10.45% at its lowest statistical point, reflecting investors discounting risk expectations.
ETF flows recovered as outflows fell by more than half, but trading volume fell 27.7% to $13.7B at its low band.
ETF MVRV crossed its higher statistical level to 2.43, indicating massive unrealized gains that will likely generate selling pressure if investors start taking profits.
On-Chain Activity Strengthens Amid Profit-Taking Signals
Bitcoin active addresses climbed above their high band to 793k. This shows major network engagement and user participation.
Transfer volume stabilized at $8.5B after previous declines, while fee volume rose 10.3% as users paid more for transaction inclusion priority.
Glassnode indicates profitability levels are uneven, with 94.1% of Bitcoin presently in profit, short of the record statistical high of 97%.
Net Unrealized Profit/Loss increased to 8.5%, near its top band of 11.1% and reflecting total profits from owners.
Domination by Profit-Taking Presents Potential Headwinds
The Realized Profit/Loss Ratio grew to 1.9, which indicates profit realization is higher than loss realization because speculators close gains.
This metric’s elevation suggests growing tendencies toward selling among profitable holders.
Market structure shifted from seller exhaustion to renewed buying interest, but is positioned for sentiment to change quickly with high profitability.
The convergence of high unrealized gains and active profit taking provides potential resistance for further upside movement.
Technical Recovery Requires Volume Confirmation
The bounce back to $121k is a technical bounce from oversold levels, but without the volume support to push through persistent up moves. Thin trading volumes in the spot ETF markets indicate reduced conviction among buyers.
Options positioning in the market means that investors are waiting even after making profits, which generally precedes consolidation moves or larger directional moves.
Bitcoin’s ability to reach new all-time highs depends on a higher level of market participation coming back to propel present levels.
The technical rebound provides a base, but requires increased volume and continuous buying pressure to move further upward.
Existing levels of profitability are opportunity and risk – while overall gains suggest bull market conditions, they also offer fuel for pressure sales in the event that market mood changes.
Monitoring participation levels and profit-taking will be crucial to deciding whether the recovery can make new highs or is in danger of consolidation.
