Analysis: Bitcoin spot liquidity weakness and ETF outflows are weighing on the market, but slowing capital outflows show initial signs of stabilization.

Glassnode’s Bitcoin Market Pulse Report notes that Bitcoin rebounded slightly after pulling back from the $65,000 level over the past week, but remains in a clear range-bound pattern overall. Spot trading volumes and on-chain transaction throughput have continued to contract, reflecting weak market liquidity and low participation. Derivatives markets are also cautious: leverage has expanded moderately, but aggressive trading in perpetual contracts has consistently leaned toward sellers, indicating more aggressive distribution activity. Positive funding rates signal bullish sentiment remains intact, while the options market continues to price downside protection, with premiums still high relative to realized volatility. Institutional demand has weakened in tandem: spot ETF volumes coincide with net outflows, aggregate holdings are near cost basis, leaving regulated investors with limited unrealized profit potential, and institutional accumulation has stalled temporarily. On-chain profitability is under pressure, with a large portion of Bitcoin supply in loss, and realized losses consistently outpacing realized gains. The report also points out that the pace of broader capital outflows has begun to slow, an early sign that selling pressure may be stabilizing. The overall market structure remains caught between persistent short-term selling pressure and relatively resilient long-term holdings. Weak spot liquidity, soft institutional capital flows, and elevated realized losses all point to continued consolidation, while slowing outflows suggest the market may be approaching a more balanced state ahead of its next directional move.