Dollar Weakness Drives 'Defensive' Market Conditions for Crypto

The Glassnode Market Compass Composite has reached a score of 25/100, indicating 'Defensive' market conditions, according to its latest report. This marks an improvement from last month's score of 22 and the week prior's score of 21.

The main driver behind this shift is the softening U.S. dollar, which has helped stabilize risk assets like Bitcoin. Macro conditions, the largest weight in the Composite, have climbed from 13 to 23 over the past month as the dollar continues to struggle below its 200-day moving average.

Bitcoin's price hovers near $63,900, a premium of about 21% above the average cost basis of $52,800. Realized profit-and-loss remains slightly positive at 1.05, indicating stability, while option-implied volatility has ticked up to 36 after hitting a two-year low.

The U.S. spot Bitcoin ETFs have seen robust inflows, averaging $95 million in net daily creations over the past week. This passive demand has helped sustain market sentiment, with 43% of recent buyers now in profit despite a slight dip in spot prices.