Bitcoin's Rally Faces Hurdles as Spot Buyers Lose Conviction

Bitcoin's price has been steadily increasing, with some analysts attributing this growth to fresh capital pouring into the market. However, according to Glassnode's latest weekly report, spot buyers seem uninterested in participating in this rally.

The report notes that Bitcoin traded near $84,000 after reaching $87,000 on the previous Wednesday, with a 4% gain in the week ending September 28th. This growth can be attributed entirely to the prior Monday's jump, as there was limited follow-through for the rest of the week.

The Relative Strength Index (RSI) climbed 14.8% to 70.4, surpassing its upper band and indicating momentum from earlier advances. Meanwhile, perpetual futures traders turned sellers as open interest rose 2.1% to $38.9 billion, remaining elevated even as bullish conviction waned.

One area of interest is the strong inflows seen in US spot ETFs, which pulled in approximately $2.7 billion in weekly net inflows, significantly exceeding the report's upper band. This trend continued despite a decline in trading volume from $18.1 billion to $14.9 billion.

Additionally, capital flow data showed monthly realized-cap growth reaching 1.1%, above its upper band, while the share of supply in profit rose from 69.3% to 74%. This indicates that buyers are absorbing supply at higher valuations but also gives holders a reason to sell into strength.

Glassnode noted that Bitcoin's price needs to clear and hold above the zone between $84,000 and $85,000 to sustain the rally. This area has more long-term holder coins clustering around it than any other price level on the chart.