After a period of heavy selling, Bitcoin (BTC) market activity appears to be stabilizing, according to new data from on-chain analytics firm Glassnode.
In a recent X post, the firm noted that, for the first time since the October 10th market flush, both spot and futures Cumulative Volume Delta (CVD) have flattened, signaling that aggressive selling pressure has subsided over the past several days.
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CVD measures the net difference between buying and selling volume on spot and futures markets, helping identify whether aggressive buying or selling pressure is dominating the market.
Accordingly, funding rates on derivatives remain below the neutral 0.01% threshold, which means that traders are not overleveraged on long positions and the market is not overheated.
Glassnode also highlighted that funding turned negative multiple times over the last two weeks, reflecting a cautious stance among market participants.
Short-dated options skews, which show whether traders expect the price to rise or fall in the near future, also point to heightened negative sentiment, with traders pricing in potential downside risks.
However, Glassnode emphasized that these sentiment extremes often coincide with opportunity zones, historically marking periods where market trends reverse.
Typically, the combination of flattened CVD, low funding rates, and extreme short-term options sentiment indicates that selling pressure has eased.
Such conditions may set the stage for a potential trend reversal in the coming days, offering traders and investors an opportunity to assess positions cautiously.
Why This Matters
The easing of aggressive selling, low leverage, and extreme short-term sentiment suggests that Bitcoin may be approaching a potential trend reversal.
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When selling pressure eases, it indicates that the market may be stabilizing, creating conditions for potential price reversals or recovery.
CVD measures the net difference between buying and selling volume on spot and futures markets, showing whether buying or selling pressure dominates.
Funding rates are periodic payments between long and short traders in derivatives markets. Low rates suggest traders are not overleveraged and the market isn’t overheated.
Short-dated options skews show trader expectations for near-term price moves. Negative skews indicate caution and potential downside risk, while extremes can signal opportunity zones.
Flattened CVD, low funding rates, and extreme sentiment suggest selling pressure has eased. Historically, these conditions can precede a market trend reversal.
