Bitcoin's market liquidity continues to contract following a sharp retracement from its February peak. On-chain metrics from Glassnode show a slowdown in capital inflows and decreased activity in the spot and futures markets.
Slowdown in Capital Inflows
Glassnode reports a significant slowdown in capital inflows, with exchange inflows plunging by 54% from their cycle highs, indicating waning investor participation.
Decline in Futures Interest
Open interest in Bitcoin futures has dropped by 35%, declining from $57 billion at its peak to $37 billion, reflecting a broader pullback in leverage and speculative trading.
Impact of Macroeconomic Factors
A shift in focus toward global macroeconomic developments is also influencing the market. Israel's strikes on Gaza and the consequent gold rally are factors affecting Bitcoin's pricing.
Bitcoin finds itself at a critical juncture with shrinking liquidity and reduced speculative activity keeping volatility high. Future market movement will depend on macroeconomic conditions and risk sentiment.
