Bitcoin faces thin liquidity and missing demand amid seller stress — Glassnode

• Bitcoin remains trapped between the $63,000 Median Realized Price and $68,700 Short-Term Holder Cost Basis as volatility compresses.
• Spot exchange volume has fallen to its lowest level since early 2019, signaling unusually weak participation and market activity.
• Glassnode stated that sellers are tiring, but Bitcoin is yet to experience the deeper capitulation that marked previous market bottoms.

Bitcoin (BTC) is showing signs of growing market exhaustion, with weakening liquidity and subdued demand leaving the market vulnerable to a sharp move, according to a Glassnode report on Wednesday.

The firm stated that Bitcoin is trading between two important cost-basis levels as market activity has fallen to its lowest point since 2019. Spot price remains above the Median Realized Price at $63,000 but below the Short-Term Holder Cost Basis at $68,700.

“Price has spent nearly three months in this pocket, and the two levels keep converging as volatility compresses,” Glassnode wrote.

The firm stated that a sustained move above $68,700 could return recent buyers to profit and expose the market to its first major test of overhead supply. However, a break below $63,000 could leave Bitcoin with limited support before the June lows.

Bitcoin trading activity falls to seven-year low as market participation continues to weaken

The lack of direction is also visible in spot market activity. Glassnode stated that Spot Exchange Volume has fallen to its lowest level since the series began in early 2019. Even after excluding Binance, trading activity is approaching levels last seen during the 2023 bear market.

Glassnode warned that such a thin market could amplify the next major move. With fewer participants and less liquidity, even modest buying or selling pressure could have a larger impact on price.

“Participation this low rarely lasts, and it is the classic setup for a volatility expansion,” the report stated.

Despite the weak market structure, the report identified several signs that selling pressure is beginning to fade. Around half of Bitcoin’s circulating supply currently remains in unrealized profit, while the Seller Exhaustion Constant has fallen to a cycle low. The indicator, which combines supply in profit with volatility, is now at its weakest readings since 2013.

However, Glassnode stressed that the market has yet to experience the deeper capitulation seen at the bottoms of previous bear markets.

“Sellers are visibly tiring, but the final flush that ended earlier bears has not happened,” the firm said.

Adjusted SOPR also shows continued resistance around the break-even level. The seven-day average has returned to 1.0 nine times since Bitcoin’s October peak, with sellers using each recovery toward that level as an opportunity to exit.

A stronger recovery would therefore require Adjusted SOPR to remain above 1.0 during a sustained rally.

At the same time, July’s US inflation data offered little immediate relief. Core CPI eased to 2.5%, while headline inflation remained unchanged. Bitcoin showed only a limited reaction, while equities also slipped.

Glassnode highlighted that the market’s response may be more important than the inflation print itself. The report warned that failure to build on the inflation data would reinforce concerns that demand remains weak.

“If price cannot build on this news over the coming sessions, we would read that as confirmation that demand remains absent,” the report added.

Bitcoin is trading at $63,513, down 0.3% in the past 24 hours.