Bitcoin could remain susceptible to further downward pressure unless we see a resurgence in liquidity inflows. While some speculative activity persists, the broader market remains defensive.

Bitcoin’s market structure reflects growing risk aversion, with ETF outflows, weakening futures, and declining on-chain activity. Rising options hedging and falling profitability signal investor distress. Without renewed liquidity, downside pressure may persist despite spot market resilience.

In this analysis, we utilize concepts borrowed from thermodynamics, to model behaviour of Bitcoin market participants during cyclical tops and bottoms. What we seek are rapid phase changes, analogous to the transition between bull and bear market regimes.

In this Market Pulse, we leverage principles used in Bitcoin behavioural analysis to develop a framework analogous to Measurement While Drilling (MWD) methods. The goal of this framework is to measure investors' resilience to price volatility, and develop a cycle extreme detection model.

As the market rallies from the recent lows, we inspect whether Bitcoin Long-Term Holders are taking the opportunity to exit positions at or above their aggregate cost basis.