BTC Market Pulse: Week 8

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Overview

Momentum has improved from deeply oversold conditions, signalling easing downside pressure and tentative buyer re-engagement. However, momentum remains far from a “risk-on” regime, and participation has thinned meaningfully, suggesting the move is stabilisation-led rather than conviction-driven.
Spot conditions show early signs of moderation, but remain defensive. Aggressive sell-side pressure has cooled, and ETF outflows have eased, reducing a key headwind. That said, trading activity has dropped materially and profitability for ETF holders has compressed back toward cost basis, leaving this cohort more sensitive to volatility and prone to derisk into rallies.

Derivatives markets continue to lean risk-off. Leverage has been unwinding, funding has cooled as traders step back from paying for long exposure, and perpetual flows remain sell-dominant despite improvement. Options positioning is steady, but implied volatility has slipped below realized, suggesting near-term risk may be underpriced even as downside hedging demand only marginally relaxes.

On-chain activity remains subdued. Network engagement, economic throughput, and fee pressure have all cooled into weak conditions, consistent with a quieter market phase. Capital flows remain negative and unrealized losses still dominate, aligning with a late-stage correction or early accumulation backdrop where participants remain cautious and selective.

Overall, conditions remain defensive across spot, derivatives, ETFs, and on-chain indicators. While sell pressure appears to be moderating, participation and capital flows remain weak, leverage is still being reduced, and risk may be underpriced in options markets. A durable recovery still depends on renewed spot demand capable of sustaining price beyond the recent rebound zone.

Off-Chain Indicators

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