Bitcoin was the outlier this week. While major U.S. stock indexes hit fresh records, gold climbed and crude oil opened sharply lower after supply-risk premiums were erased by de-escalation headlines, BTC was still sitting near the same level as last week, according to a new report from Glassnode.
The report, written by Glassnode and published in a version translated by AididiaoJP for Foresight News, frames the market as deeply compressed. Bitcoin is not pricing in favorable macro developments, but it is also showing little sensitivity to negative shocks. In Glassnode’s reading, bottoming conditions are building, though the process still lacks the kind of forced event that marked prior cycle lows.
Other markets moved. Bitcoin did not.
Glassnode compared major assets on the same baseline and found a clear split across the week. Equities broke to record highs, gold moved higher as well, and oil repriced lower after the weekend open. Bitcoin, despite being the only one of those assets that trades continuously through the weekend, was still slightly below the level where last week’s report left it.
That left BTC trailing the S&P 500 by more than 4 percentage points. For Glassnode, that lack of movement is the central issue. The report tries to explain why Bitcoin has not joined the broader move in risk assets and why even market stress has failed to break it out of its range.
FOMC fear faded fast
The report says the equity move hinged on the Federal Open Market Committee decision. On July 29, the Federal Reserve left rates unchanged. The initial market response was to sell. The S&P closed at its lowest level of the summer, and equity fear measures peaked at the same time.
That reaction did not last. Glassnode says the speed of the reversal ranked among only 10 such episodes since 2009. Four days after the decision, the index closed at 7,737, breaking above the record highs set in June. Europe’s STOXX 50 also reached a record that same day. The sequence mattered: markets first sold “patience,” then spent the next several days deciding that patience was actually supportive.
Forward-looking data improved, but Bitcoin did not reprice
Glassnode argues that the unchanged-rate decision was interpreted positively because underlying forward data had started to turn. The leading economic index reversed a year-long decline within two months, while consumer confidence posted its sharpest two-month rise since early 2024.
That mix matters. A central bank that is no longer tightening, paired with improving forward indicators, removes the risk of additional restraint and leaves room for growth to do the work on its own. Equities priced that in. Bitcoin did not. The report says the next set of market data should show whether BTC’s stillness reflects weakness or a kind of numbness.
A 25-minute stress test on chain
Glassnode points to an incident on Friday, July 31, as one of the cleanest holder-behavior experiments of the cycle. In a 25-minute window, attackers exploited a five-year-old key-generation vulnerability in Coldcard hardware wallets and stole about 594 BTC from roughly 500 self-custody wallets. The coins were worth about $38 million at the time.
The theft ended almost as soon as it began. The on-chain response lasted for days. Glassnode says “1y+ revived supply” — coins that had been dormant for at least one year before moving again — surged to about 119,000 BTC over the next three days, roughly 200 times the stolen amount. The report interprets that as a broad migration by holders moving funds out of seeds they feared might be compromised.
Against three weeks of normal traffic, the move stands out as an isolated spike. Only about one-tenth of those coins ultimately reached exchanges, according to the report. New address counts returned to baseline within three days, while supply held by wallets younger than one month has risen 40% since then and continues to climb.
Glassnode says that pattern points to migration into fresh cold storage, not liquidation. Spot markets barely registered the event. One of the largest forced old-coin movements of the cycle produced no measurable selling pressure and no clear price response.
For the report, that says a lot about the present market. If BTC can absorb a theft that hits a core self-custody cohort without a meaningful move, the market is not showing strong active demand, but it is not showing strong active supply either.
Bottoming signals are appearing, but without a flush
Bitcoin bottoms usually arrive through pain. In earlier cycles, capitulation selling crushed the share of supply in profit and sent volatility sharply higher. This time, Glassnode says, the market has reached a similar area through boredom instead.
Profit compression is already in place, but it came through months of slow decline rather than a violent washout. As a result, volatility is sitting near the floor instead of near the ceiling. The destination looks familiar. The path does not.
Seller exhaustion is near the room, not inside it
Glassnode uses its seller exhaustion constant — the share of supply in profit multiplied by realized volatility — to sharpen that point. The 30-day average is now at a cycle low and has entered the zone where prior bottoms started to form.
Even so, it remains about one-third above the floor reached in the final stage of every prior bear market, according to the report. Glassnode’s phrasing is that the indicator is standing at the door, not yet in the room. If earlier cycles remain the template, one last leg down has still not appeared.
The institutional demand track is still running in reverse
Demand data tell a matching story. Glassnode says the institutional channels that defined the previous bull market — U.S. spot Bitcoin exchange-traded funds and corporate treasuries — have spent the past quarter giving coins back.
Funds alone saw net outflows of about 65,800 BTC in June, the worst month on record. By comparison, the strongest month in late 2024 brought net absorption of more than 218,000 BTC. Corporate treasury buying is still continuing, the report says, but the scale is nowhere near enough to offset fund selling.
That leaves the current bottoming process, however it resolves, having to form without the structural bid that dominated the market over the past two years. In Glassnode’s view, that matters until the flow turns again.
From risk-off to defensive
Glassnode’s market compass summarizes the present regime. After spending nearly three weeks pinned in a risk-off zone, the composite measure has climbed into a defensive zone, with its inputs broadly aligned.
Defensive does not mean momentum has returned. It means deterioration has stopped. Glassnode says the bottom checklist is only half complete, and the missing half depends on the same absent ingredient: a forced event that finishes the washout.
Options price calm, sentiment does not
In options, the structure looks even stranger. Glassnode says the so-called fear premium in Bitcoin options is less about aggressive demand for puts and more about the disappearance of call buying.
Upside implied volatility has printed near the lowest level in the history of the metric, close to 23%. Downside implied volatility, by contrast, looks fairly ordinary. The last time it was cheaper was in August 2023. The asymmetry is not a rush into downside protection. It is a collapse in willingness to pay for upside.
Short-term sentiment, though, is still jumpy. Glassnode’s fastest positioning gauge, the 1-week 25-delta skew, fell by more than 8 points in a single day this week even though spot barely moved. Two weeks earlier, around the July high, a similar vacuum opened and then closed within four days.
The report says short-term fear pricing keeps flipping on moves of only a few percentage points even as the level of volatility being priced stays pinned near the floor. Most of that whipsaw is happening in options, not perpetual futures. Perpetual funding rates remain anchored near long-run normal levels, which suggests leverage is not the amplifier here. Sentiment is.
Glassnode’s summary is concise: the market bought one week of calm, while still paying a premium for six months of risk.
History leans upward after this kind of squeeze, but one condition is missing
On the constructive side, Glassnode says history has a view on squeezes of this depth. When 1-month realized volatility has been compressed to similar levels, the release has almost always resolved to the upside. The report calls that the strongest positive data point in the current setup.
But there is a condition attached. In most earlier examples, demand engines were at least idling in the background by the time the squeeze released. This time, the institutional track is still running in reverse, and seller exhaustion has not yet reached the final bear-market floor seen in older cycles.
An unstable equilibrium
Glassnode closes with a simple description of the regime: Bitcoin is compressed, under-positioned, and lagging a global risk backdrop that has already moved on. Bottoming conditions are assembling, but they are not complete.
That compression means the eventual move is likely to look large relative to current positioning. The front end of the options curve is also set up in a way that could leave participants chasing after the move starts rather than before. Glassnode says a return to persistent net inflows in the ETF channel, or an upside expansion in volatility out of the current squeeze, would confirm improvement.
If the seller exhaustion constant is pushed lower into the region reached at the final stage of every previous bear market, that would instead mark the completion of the more classical bottom template. As the report puts it, a market that is “priced for zero and overreacts to everything” is not a stable state.