Bitcoin's Thin Market Structure Sets Up Volatility Expansion

Bitcoin's market structure is showing signs of exhaustion, according to a recent report by Glassnode. The firm found that Bitcoin is trading between two key cost-basis levels, with the spot price remaining above the Median Realized Price at $63,000 but below the Short-Term Holder Cost Basis at $68,700.

This lack of direction is also reflected in spot market activity, which has fallen to its lowest level since 2019. Even excluding Binance, trading activity is approaching levels last seen during the 2023 bear market.

Glassnode warned that such thin markets can amplify the impact of even modest buying or selling pressure, leading to a larger price move. The firm noted that participation this low rarely lasts and sets up a classic scenario for volatility expansion.

Despite the weak market structure, Glassnode identified some 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.