Bitcoin has made a recovery back towards $70,000 following a drop to around $67,000, but Glassnode warns that the rebound lacks the necessary demand profile to sustain a more lasting recovery.
In their most recent weekly report dated March 25, titled Awaiting Liquidity, the on-chain analytics firm highlighted that while certain pressure points have eased, such as sell-side intensity and ETF outflows, the market is still lacking significant spot volumes and robust demand to signal a strong breakout phase.
Limited Spot Bitcoin Demand Could Constrain Growth
According to Glassnode, while there have been improvements in the market structure, it is not yet enough to declare the correction over. The report stated, “Bitcoin is showing signs of improvement after a corrective move, with price stabilization and better ETF flows, but the market is not yet in a high-conviction breakout phase.”
Although a new accumulation cluster is forming around current levels, with a cost basis near $70,200, Glassnode emphasized that the current base of buyers remains modest and the market remains fragile.
Above the market, resistance levels are significant, with short-term holder supply concentrated between $93,000 and $97,000. The report also highlighted a heavy concentration of short-term holder supply above $84,000, which could lead to renewed selling pressure during any recovery attempts.
On-chain metrics indicate a market under stress, with unrealized losses stabilizing above 15% of market cap, resembling fear seen in previous periods. Realized profitability has also decreased significantly, indicating a lack of fresh capital entering the market.
Spot market activity has been relatively muted, with current volumes suggesting that the rebound to $70,000 has been driven more by selective buying rather than broad-based demand.
While ETF flows have improved and derivatives positioning has become less one-sided, Glassnode pointed out that the scale of these inflows remains limited compared to previous accumulation phases.
Looking ahead, the market will be influenced by Friday’s options expiry, with dealers concentrated in short gamma positions between $70,000 and $75,000. Once this influence clears, Bitcoin may become more sensitive to broader market conditions.
As of the latest update, BTC is trading at $69,961.
Featured image created with DALL.E, chart from TradingView.com