Since early February, Bitcoin has repeatedly failed to post a weekly close above $70k, establishing this region as a meaningful near-term resistance level. To assess whether this price rejection reflects a genuine deterioration in demand, we turn to the 30-day Simple Moving Average (30D-SMA) of Realized Profit, a metric that aggregates the USD-denominated profit locked in by on-chain participants at the moment coins are spent, smoothed to filter short-term noise.
As price stabilized beneath the $70K threshold, this indicator contracted sharply from above $1B per day to approximately $370M per day, a decline of roughly 63%. This compression in monthly-averaged realized profit signals that the cohort of buyers willing to transact at a premium has materially thinned, with buy-side liquidity now at its weakest since the August–September 2024 period.
Taken together, the evidence suggests that upside momentum has stalled, leaving the price in a state of directionless consolidation until fresh demand catalysts emerge.
Regime Detection in Bear Market
Sideways price action is a recurring structure across both bull and bear market cycles, therefore context is everything. Two periods of horizontal consolidation can carry vastly different implications depending on the underlying demand regime, making it essential to look beneath price for corroborating evidence.
One effective lens for this purpose is the Percent of Supply in Profit, which measures the share of circulating Bitcoin supply held at an unrealized gain relative to each coin's on-chain acquisition cost.
When broadly elevated, this metric reflects widespread investor confidence; when it deteriorates, it signals a growing cohort of underwater holders, a condition historically associated with sustained selling pressure.
Since early February, this indicator has broken below its -1 standard deviation threshold near 60%, and currently sits at approximately 57%. Readings at this level have historically coincided with the early stages of deep bear markets, most notably May 2022 and November 2018. This suggests the present consolidation may be less a springboard for recovery, and more a continuation of the prevailing adverse market regime in mid-term.
Short-Term Relief Rallies and the Cost Basis Ceiling
Despite the headwinds posed by diminishing buy-side liquidity and a market regime starved of broad unrealized profitability, the multi-week sideways consolidation is not without a constructive interpretation. A local equilibrium of this nature can, and often does, precede short-term relief rallies.
A practical on-chain tool for gauging the potential exhaustion point of such rallies is the Short-Term Holder Cost Basis, specifically for coins aged between one week and one month. This cohort represents the most recent wave of market participants, whose acquisition price acts as a key behavioral anchor: in the deeper stages of a bear market, local bounces tend to stall as these recent buyers approach breakeven, incentivizing them to exit positions or lock in thin profit margins before conditions deteriorate further.
Currently, the cost basis of this 1W–1M holder cohort sits near $70k, meaning the ±2% zone surrounding this level — roughly $68.5k to $71.5k— represents a significant potential resistance and distribution zone for any near-term price recovery.
Off-Chain Insights
Spot Flows Shows Signs of Recovery
Spot markets recently experienced a sharp wave of sell-side dominance, with Cumulative Volume Delta (CVD) across major exchanges plunging to deeply negative levels as aggressive market sell orders drove the latest price drawdown.
Over the past few days, however, the pace of selling appears to be moderating. Coinbase spot CVD has begun to rebound, suggesting early signs of renewed bid-side activity, while Binance and aggregate exchange flows remain weak but are no longer accelerating lower.
This shift hints that the most intense phase of spot-driven distribution may be easing. Nevertheless, a sustained recovery will likely require broader improvement in spot bid absorption across multiple exchanges before stronger accumulation dynamics can take hold.
ETF Outflows Ease as Early Inflows Reappear
US Spot Bitcoin ETFs experienced sustained outflows during the recent market decline, reflecting persistent institutional de-risking as prices moved lower. The 7-day moving average of net flows remained negative for several weeks, reinforcing the broader risk-off environment across regulated investment channels.
Over the past few days, however, flows have begun to stabilize, with the first signs of renewed inflows emerging. This shift suggests that institutional selling pressure may be moderating as Bitcoin consolidates near recent lows.
While it is too early to confirm a durable reversal in demand, a continued recovery in ETF inflows would signal improving institutional sentiment and could provide an important source of spot-side support for the market.
Perpetual Premium Continues to Compress
The Perpetual Market Directional Premium continues to trend lower, reflecting a sustained reduction in bullish positioning across perpetual futures markets. The metric has declined steadily in recent weeks as leverage and directional conviction have cooled alongside the broader market pullback.
Over the past few days, the premium has compressed further toward cycle lows, signalling that speculative long exposure is continuing to unwind. This dynamic suggests that derivatives traders remain cautious, with demand for leveraged upside exposure notably subdued.
While the decline reflects weakening bullish momentum, it also indicates that excess leverage is being flushed from the system. A stabilization in the premium could signal that derivatives positioning is approaching a more neutral footing.
Volatility Compression Signals Stabilization
Implied volatility has continued to compress following the spike observed in early February. Across the main tenors, ATM IV has moved materially lower, indicating that traders are no longer aggressively pricing tail risk.
This shift reflects a stabilization in sentiment after a period of forced deleveraging and liquidation-driven volatility. As panic pricing fades, options markets begin transitioning from stress conditions toward a more neutral volatility regime.
Lower implied volatility also changes positioning dynamics. When volatility declines while price stabilizes, long option holders face increasing theta decay, making directional conviction more important.
For now, volatility compression suggests the market is moving away from crisis pricing and into a consolidation phase where positioning, rather than panic hedging, becomes the dominant driver of price action.
Skew Normalization Reflects Fading Downside Fear
Skew has compressed materially from the extreme levels observed during the February sell-off. Over the past two weeks, as the chart shows, each move lower in BTC price has triggered a progressively milder reaction in the options market. Traders have been far less aggressive in bidding for downside protection, gradually pulling the skew lower. During the peak of the sell-off, put demand surged and pushed skew deep into put territory as traders rushed to hedge against further downside. That urgency has clearly eased.
Rather than a full normalization, what we are seeing is a repricing of risk: skew has moved from the mid-20s to the low-10s, still reflecting demand for protection but at far less stressed levels. This shift suggests that the immediate need for downside hedging is fading. Some protective positioning is being unwound, while interest in upside exposure is slowly reappearing.
Historically, this type of skew compression tends to occur when markets move out of stress phases and begin transitioning into more balanced positioning environments.
Options Flow Rotates Toward Upside Calls
The Put/Call volume ratio measures the relative trading activity between puts and calls. When the ratio declines, it indicates that call activity is increasing relative to puts.
As implied volatility compresses, put holders face increasing theta decay and mark-to-market pressure. With downside momentum weakening, these positions become more costly to carry, prompting traders to buy back their hedges. This dynamic can create incremental spot demand as protective positions are unwound.
This environment has incentivized traders to position for a tactical upside move, a shift that is visible in the Put/Call volume ratio. Since February 28th, the ratio has moved from 1.89 to 0.4, marking a significant reversal in options flows and highlighting the growing willingness of the market to position for upside.
This shift is also reflected in the increasing interest around the $75,000 strike.
The combination of declining volatility and rising call activity suggests a market gradually transitioning away from defensive hedging toward more opportunistic upside positioning.
$75K Emerges as the Key Gamma Magnet
The rotation toward call activity is also visible in the growing interest around the $75,000 strike, which has become the most significant negative gamma level for dealers.
The $75,000 strike currently hosts a substantial concentration of negative gamma, estimated at around $2.3 billion across expiries, with approximately $1.8 billion concentrated in the March 27th expiry.
Negative gamma environments can amplify price movements as dealer hedging flows reinforce the prevailing trend. When price approaches these zones, hedging activity can pull the market toward the strike, creating a magnet effect. Over the past week, this magnet has effectively shifted from the $60K to $65K area up toward the $75K strike.
For now, $75K stands out as the key level where positioning and liquidity could converge in the coming sessions.
Looking at the premium dynamics for the $75K calls across the next three monthly expiries, roughly $14.5 million in net call premium has been traded. This represents the difference between premium bought and premium sold.
Notably, nearly two thirds of this net premium has been accumulated over the past week, helping fuel the current rebound.
Conclusion
Bitcoin remains locked in a tenuous consolidation below the $70k threshold, with several indicators suggesting that buy-side momentum has materially weakened. Realized profit has contracted sharply, highlighting reduced willingness among market participants to transact at elevated prices, while the decline in the Percent Supply in Profit places the current regime within a historical context often associated with the early stages of bear market conditions. At the same time, the cost basis of short-term holders near $70k is emerging as a key behavioural ceiling, likely acting as a distribution zone should price attempt a near-term recovery.
Beneath the surface, however, some signs of stabilization are beginning to appear. Spot selling pressure is moderating at the margin, ETF outflows are easing with early inflows returning, and derivatives leverage continues to be flushed from the system. In options markets, volatility and skew are normalizing as panic hedging fades and positioning rotates toward upside exposure. With the $75k strike emerging as a major gamma magnet, the market appears to be transitioning from stress-driven selling toward a more balanced positioning regime. Whether this evolves into a sustainable recovery will ultimately depend on the return of stronger spot demand to absorb overhead supply.
Disclaimer: This report does not provide any investment advice. All data is provided for informational and educational purposes only. No investment decision shall be based on the information provided here, and you are solely responsible for your own investment decisions.
Exchange balances presented are derived from Glassnode’s comprehensive database of address labels, which are amassed through both officially published exchange information and proprietary clustering algorithms. While we strive to ensure the utmost accuracy in representing exchange balances, it is important to note that these figures might not always encapsulate the entirety of an exchange’s reserves, particularly when exchanges refrain from disclosing their official addresses. We urge users to exercise caution and discretion when utilizing these metrics. Glassnode shall not be held responsible for any discrepancies or potential inaccuracies.
