Glassnode Warns Traders Are Moving Into Defense After Bitcoin Crash

The crypto market has entered a defensive phase, according to Glassnode, which cited multiple technical and on-chain indicators. Bitcoin’s sudden drop from $115,000 to $104,000 in just four days is being described by analysts as a fast and ruthless market cleanup that shook out weaker ￰0￱ Bitcoin has rebounded, sentiment has not fully ￰1￱ are still cautious, and this defensive stance is visible in current positioning and capital flows. On-Chain Metrics Reveal Growing Market Stress Glassnode highlighted several signals pointing to defensive behavior across the market: The RSI briefly broke below its lower band and remains in a weak zone Cumulative volume delta stays negative, showing continued selling pressure Spot volumes fell during the drop, signaling soft demand Open interest and funding both declined The 25-Delta Skew in options surged, showing increased demand for downside protection Long-Term Holders Accumulate as Confidence Lags Analysts also noted that NUPL has turned negative and RPL fell below prior lows, both signs of rising stress in the market.

However, Realized Cap continues to climb, suggesting long-term investors are quietly accumulating Bitcoin despite short-term ￰2￱ concluded that while the rebound is encouraging, the market remains fragile and confidence must return before bullish momentum can resume. Meanwhile, CryptoQuant recently suggested that Bitcoin may be entering the late stages of its bullish cycle, adding more intrigue to what comes ￰3￱ say the coming weeks may bring the next decisive ￰4￱ flows, liquidity trends, and macro events could either reignite momentum or deepen caution. A bullish scenario would require stronger inflows and a recovery in demand, while a bearish outcome could emerge if defensive positioning intensifies and liquidity ￰5￱ tension building on-chain, markets may be approaching an inflection point where the next major breakout or breakdown ￰6￱ context, CryptoQuant recently suggested that Bitcoin may be entering the late stages of its bullish cycle, adding more uncertainty — and excitement — to what lies ahead.