Bitcoin (BTC) Market: Institutional Strength Amid Retail Fragility
Felix Pinkston Jul 02, 2025 12:36
Bitcoin shows cautious optimism with institutional backing and renewed accumulation, but retail participation remains weak, according to Glassnode's latest market analysis.
Bitcoin (BTC) has entered a period of cautious optimism, driven by stronger institutional involvement and renewed accumulation, according to a recent analysis by Glassnode. Despite these positive signals, the participation of retail investors remains fragile.
Overview
Bitcoin has recently shown strong recovery, aligning with stock market trends and rebounding from the short-term investors' cost basis towards a significant $108K level. This momentum shift is marked by improvements in market sentiment, as indicated by a decisive recovery in spot market momentum. The Relative Strength Index (RSI) has climbed, and Spot CVD has sharply improved, reflecting renewed buyer engagement. However, spot trading volumes remain low, suggesting that broader retail investor participation has yet to fully reignite.
In the derivatives market, futures open interest has slightly decreased from elevated levels, while funding rates have turned negative. This shift suggests some hedging or caution among leveraged traders. Interestingly, the Perpetual CVD has surged into positive territory, indicating aggressive buy-side flows despite the softness in funding rates, pointing to a nuanced shift towards accumulation in the futures market.
Options traders have shown balanced sentiment, with the 25-Delta Skew returning to neutral and the volatility spread narrowing, indicating reduced fear of sharp price swings. Although open interest has modestly decreased, it remains historically high, highlighting continued speculative interest.
ETF flows have demonstrated strength, with net inflows nearly doubling week-over-week and trade volume rising modestly. This trend underscores resilient interest from traditional finance (TradFi) investors, although the ETF Market Value to Realized Value (MVRV) ratio has risen further, suggesting growing unrealized gains that could be at risk if prices reverse.
On-Chain Indicators
On-chain fundamentals have remained steady. While active addresses have remained broadly unchanged, transfer volume has spiked, and total fees have edged up, indicating stable participation. Metrics such as the Hot Capital Share and Realized Cap Change remain stable, with the Short-Term Holder/Long-Term Holder (STH/LTH) Supply Ratio suggesting that long-term holders continue to dominate.
Profit and Loss State metrics have increased sharply, with the Percent Supply in Profit breaching its high band. The Realized Profit/Loss Ratio has also jumped significantly, indicating strong investor confidence but also heightened risk of profit-taking and demand exhaustion if price momentum stalls.
Overall, the market has entered a cautiously optimistic regime. Stronger positioning from institutional players and renewed accumulation are positive signs, but the retail side still shows fragile participation. To sustain this rally, continued demand and broader market confidence will be essential.
For more insights, visit the full analysis on Glassnode.
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