BTC Market Pulse: Week 5

Overview

Spot conditions have deteriorated, with Spot CVD flipping sharply negative and confirming a clear shift toward sell-side dominance. Netflows have also reversed into a sizeable outflow, signalling weaker institutional support and adding near-term overhead pressure.

Derivatives positioning is mixed. Futures open interest has eased, suggesting a modest reduction in leverage, however long-side funding has surged, indicating renewed demand for bullish exposure. Perpetual CVD has collapsed into the lower band, reinforcing an increasingly defensive posture in leverage markets.

Options markets remain cautious. Open interest has drifted slightly lower, while the volatility spread remains elevated relative to realised levels, despite compressing over the week. At the same time, 25-delta skew has risen sharply, signalling increased demand for downside protection.

On-chain activity remains weak. Active addresses sit below the lower band, transfer volume is hovering near range lows, and fees have compressed, reflecting reduced block space demand. Profitability has also deteriorated, with supply in profit falling and realised losses rising, suggesting stress conditions are building as market participants de-risk.

Overall, market conditions have shifted more defensive across spot, derivatives, and on-chain indicators. While leverage is beginning to cool, persistent sell-side pressure and rising hedging demand suggest the market remains fragile, with stabilisation dependent on demand returning and sell pressure fading.

Off-Chain Indicators

On-Chain Indicators

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