Bitcoin (BTC) is entering a phase where price action is being driven less by speculative momentum and more by underlying liquidity conditions, as spot demand weakens and market participants adopt a more defensive stance.
An analysis from Bitfinex points to a market that is struggling to reclaim resistance levels not due to panic selling, but because sustained buy-side demand has faded.
ETF inflows, which previously provided consistent structural support, have slowed materially, reducing passive demand and leaving price increasingly reliant on organic market participation
Spot Demand Weakens As Structural Support Fades
With ETF flows no longer acting as a steady backstop, spot market dynamics have shifted.
Selling pressure has become more persistent, limiting upside follow-through even during relief rallies.
Rather than sharp capitulation, the market has shown a pattern of absorption, where distribution occurs into strength without triggering broader disorder.
This dynamic suggests a maturing market phase in which participants are more selective, and price advances require clearer conviction rather than reflexive dip-buying.
On-Chain Signals Point To Distribution, Not Distress
Meanwhile, Glassnode on Monday highlighted a turn toward defensive positioning across on-chain and derivatives metrics.
Spot cumulative volume delta has flipped decisively negative, indicating that sellers are dominating execution.
At the same time, ETF activity tracked in the report shows net outflows, reinforcing the view that institutional participants have shifted from accumulation to caution .
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On-chain data shows long-term holders distributing into rallies, while network activity continues to cool.
Options markets reflect rising demand for downside protection, pointing to risk management rather than forced deleveraging.
Importantly, the analysis does not identify the stress signals typically associated with systemic breakdowns, such as cascading liquidations or leverage-driven selloffs.
Liquidity, Not Narrative, Now Sets Direction
Analysts state that the dominant theme is a repricing of risk tied to broader financial conditions.
Rising term premiums, pressure in bond markets, and persistent geopolitical uncertainty have tightened liquidity, constraining risk appetite across asset classes.
In this environment, Bitcoin is behaving less like a narrative-driven speculative asset and more like a liquidity-sensitive instrument.
Price advances are increasingly dependent on real capital inflows and easing financial conditions, rather than leverage, sentiment, or short-term catalysts.
The analysts further added that Bitcoin has entered a slower, more disciplined phase of the cycle, where time and liquidity do the work.
Until financial conditions improve meaningfully, the market appears positioned to consolidate rather than trend, with direction dictated by capital availability rather than momentum alone.
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