Bitcoin is caught in a fierce tug-of-war, according to Glassnode's BTC Market Pulse: Week 17 report published July 23. The analysis reveals a fractured structure where spot and derivatives markets signal bearishness, while ETF buying and long-term holder conviction act as a buffer against deeper declines.
Spot and Futures: Selling Pressure Mounts, Traders Go Short
On centralized exchanges, activity remains elevated but the tone has shifted. The cumulative volume delta (CVD) for spot markets flipped from positive to negative, indicating increased selling pressure. The futures market paints a similar picture: open interest is rising, reflecting higher risk appetite and price sensitivity, but the long funding rate has dropped markedly and perpetual CVD has plunged. Traders are willing to pay a premium to establish short positions, showing growing bearish sentiment among short-term participants.
Options and ETFs: Institutional Demand Bucks the Trend
In stark contrast, the options and ETF segments offer support. Options markets show reduced demand for downside protection, suggesting extreme bearishness is fading. Shrinking open interest may come from profit-taking or position closure, while the volatility spread indicates a shift from high-risk pricing back to neutral ground.
The standout is US spot ETFs. According to the report, ETF MVRV ratios and net inflows are both rising alongside increasing trading activity. Institutional participation through regulated channels remains robust, injecting a cautious but positive momentum into the market.
On-Chain Data: HODLers Hold Firm, Short-Term Panic Lingers
From an on-chain liquidity perspective, the market structure remains balanced. The hot capital share is declining, realized capitalization is negative but improving, indicating liquidity is becoming dormant and net outflows are slowing. The ratio of short-term holder supply to long-term holder supply stays stable, confirming that long-term investors (LTHs) maintain confidence and are not panic-selling.
Improvements in net unrealized profit/loss (NUPL) and the percentage of supply in profit point to a potential bottoming process, reducing immediate selling pressure. However, the report warns that the realized profit-to-loss ratio has declined, showing that some panic-driven loss-taking persists. The battle between bears and institutional buyers continues.
In short, bitcoin sits at a crossroads where derivative bearishness clashes with institutional spot demand. Backed by steadfast LTHs and steady ETF inflows, the market may eventually digest short-term selling pressure and find clearer direction.