Bitcoin’s recent move above the $85,000 level is not considered a strong breakout due to low trading volume and limited new capital inflows. According to Glassnode’s analysis, short-term investors are using the rise for profit-taking, while significant liquidation levels in the market are accumulating below the current price.
Glassnode noted that although Bitcoin surpassed the intense sell orders around $85,000, the move occurred with low trading volume. The total average daily trading volume of spot cryptocurrency platforms and spot Bitcoin ETFs in the US is approximately $6.8 billion. This figure is lower than about 90% of the trading days since January 2024.
According to the report, in the 30-day period ending October 5, ETF inflows, growth in stablecoin supply, and corporate treasuries’ Bitcoin purchases injected approximately $4.9 billion in new capital into the market. In contrast, Bitcoin’s realized market capitalization increased by approximately $12.8 billion during the same period. Thus, new capital inflows accounted for less than 40% of the increase in market capitalization.
Glassnode also noted that short-term investors who recently bought Bitcoin are viewing the rise as a selling opportunity. On October 4th, approximately 86% of the Bitcoins sent to exchanges came from short-term investors who were in profit. This figure marks the highest level in the past year.
The picture looks more optimistic in the derivatives market. In the Bitcoin options market, the ratio of open positions to call/put options has fallen to approximately 0.56, while investors’ spending on call options has significantly exceeded their spending on put options. This indicates that options investors are once again taking bullish positions.
The liquidation map shows that most of the risks are concentrated below the Bitcoin price. According to Glassnode, the nearest large liquidation clusters are between $81,700 and $83,300. It was also noted that the largest buy orders in the Binance order book are concentrated between $81,000 and $81,250.
Glassnode emphasized that Bitcoin needs a recovery in spot trading volume and ETF demand to regain strength, and that a strong close above $85,500 could signal that the breakout has found real buyer support. In such a scenario, the large cluster of short liquidations around $92,000 could become the target.
Conversely, Glassnode warned that the following liquidation clusters could be triggered if the strong buying zone around $81,000 is lost. Glassnode also noted that leverage levels remain high in the altcoin market and that a further drop in Bitcoin could accelerate mandatory liquidations in altcoins.
*This is not investment advice.
