Compass Investments

– The current flat movement comes after a swift reverse correction from Bitcoin’s October highs. On October 10, BTC was trading above the $113,000 mark before a sudden sell-off wiped out market hopes. Since then, the decline has reinforced a more cautious outlook, especially as the market enters a period of traditionally low trading volumes.

analysis of onchain data and derivatives indicates a steady weakening of market activity over the past quarter. Glassnode’s latest report shows a decrease in trading activity from November through December, and forecasts a further decline in implied volatility through the end of the year.

The decline in turnover reflects a more defensive stance in the overall market, with less liquid capital available to absorb volatility or maintain directional movement, Glassnode said.

This assessment is in line with market experts, in particular Markus Thielen of 10x Research, who points to signs of institutional fatigue. Despite significant inflows into bitcoin-ETFs at the beginning of the year, these investments have not yet provided a sustained upturn, forcing funds to reduce their exposure to risk and wind down operations before the end of the year.

Given the subdued participation of retail investors, analysts largely agree that there are no preconditions for a major breakthrough yet. Even the Fed’s recent neutral rate decision did not serve as an incentive for the resumption of institutional asset allocation.