Momentary Stability Without Support

GM Anon!

BTC spent the week doing what it has done for most of this month: chopping sideways inside the same $65K to $70K band, closing this week near $68K. Institutional flow has swung back toward meaningful outflows, liquidity remains thin, and broader risk appetite is tilting defensive as growth signals soften and yields stay restrictive.

This is not a market in freefall. Leverage is still compressed, open interest is subdued, and funding is only modestly positive, which reduces the odds of a reflexive liquidation unwind. But that also leaves price more exposed to spot driven pressure. With positioning light, the marginal flow matters more, and this week that marginal flow leaned toward distribution through ETFs and elevated large holder exchange activity, especially as rallies approached the top of the range.

Today’s issue focuses on what that actually means. First, we’ll map the current range structure and the flow picture across ETFs and derivatives. Then we’ll dig into the on chain split between whale linked sell side capacity and steady accumulation building in the mid $60Ks. Finally, we’ll frame the setup through macro and liquidity, and lay out what needs to change for $70K to soften or for the range to persist. Let’s dive in.

TLDR

• BTC stayed range bound between roughly $65K to $70K, ending the week near $68K.

• The range looks orderly, but underlying demand is weak and liquidity still feels thin.

• Spot ETF flows leaned negative overall, signaling institutional distribution despite a late week stabilization bid.

• Leverage remains compressed with open interest subdued, reducing the risk of a liquidation cascade.

• Funding is only modestly positive, pointing to cautious dip buying rather than crowded longs.

• With positioning light, spot flows are driving price, making moves feel sharper and more reactive.

• On chain signals are mixed: whale exchange inflows remain elevated, implying higher sell side capacity into strength.

• At the same time, accumulation is building in the mid $60Ks, with long term holders shifting back toward net buying and smaller wallets continuing to add.

• Unrealized losses remain meaningful, keeping holders sensitive and encouraging supply on rallies, especially near $70K.

• Macro remains a headwind: growth looks fragile and yields around 4%+ keep financial conditions tight, so a breakout likely needs clear, sustained spot demand

Current State Of The Market

The structure is simple and persistent. The $65K area continues to act as the lower boundary, where downside probes have attracted buyers and price has stabilized. The $70K area remains the cap, where rebounds run into overhead supply and momentum fades quickly. The February leg down broke the prior structure and forced a reset, but what followed was not trend continuation. It was a tight consolidation, with price repeatedly reverting back toward the middle of the band.

That matters because it frames how to interpret every signal this week. In a range market, you should expect mean reversion and disappointment on break attempts unless a new source of demand appears. You also tend to see the same behavior repeat: sellers show up as price approaches the top of the band, and buyers show up as price approaches the bottom, without either side gaining enough traction to sustain a move.

Flows and Positioning

ETF Flows

This week’s ETF tape was defined by distribution with a late-week stabilization bid. BTC spot ETFs finished the week net negative at roughly $165.8M of outflows, despite a meaningful rebound in the final session. ETH products also ended the week weaker, with roughly $130.1M of outflows, which reinforces that the risk reduction was not isolated to BTC.

The midweek stretch did most of the damage. Flows were consistently negative across several sessions, with the largest pressure concentrated into the middle of the week, keeping the tone defensive and making it difficult for price to build momentum inside the $65K to $70K range.

Friday was the first real counter-signal. The day recorded about $88.1M of BTC inflows, while ETH was essentially flat to slightly negative at roughly $0.7M out, and SOL was modestly positive around $3.7M. That read is best described as selective stabilization rather than a full reversal. It shows buyers are willing to step in at these levels, but the broader weekly profile still says institutional demand is not consistently supportive yet.

Derivatives & Leverage

Derivatives remain restrained, which is both stabilizing and limiting. Aggregated open interest is holding around $20.7B, near the lows that followed the prior deleveraging.

Funding is modestly positive, around +0.0039, with predicted funding around +0.0029, pointing to a mild long bias that looks more like tactical dip buying than confident trend positioning.

That mix implies the market is not crowded. It lowers the probability of a forced liquidation cascade, but it also reduces the chance that positioning itself drives a breakout. With leverage light, price is more likely to follow spot flows. When ETF flows are negative and liquidity is thin, that tends to keep the range intact and makes moves feel sharper, because there is less derivative positioning to buffer them.

On Chain and Holder Behavior

On-chain conditions point to a market that is still working through supply, even as accumulation builds in pockets.

Start with the sell-side signals. The Exchange Whale Ratio is cited around ~0.64, described as a decade-plus extreme. That suggests large holders dominate exchange inflows, which is typically associated with elevated sell capacity.

It does not mean whales are selling constantly, but it does mean the market has to be prepared for supply to appear quickly into strength, especially near obvious levels like $70K where profit-taking is already active.

Furthermore, realized profit data suggests persistent selling pressure on moves toward $70K, where relatively modest profit-taking is still enough to trigger rejection. That is a classic late correction dynamic.

At the same time, there are credible accumulation signals that help explain why the lower end of the range continues to hold. Long-term holders have shifted from six months of distribution to net accumulation after price traded into the mid $60Ks, implying improved conviction at lower levels.

Smaller wallets, particularly the 0.1 to 1 BTC cohort, have reached a 15-month high in holdings, consistent with steady dip accumulation. This matches the broader point you included about a declining network distribution factor, where supply concentration among larger holders falls as coins redistribute to smaller participants.

The stress backdrop remains meaningful. Relative unrealized losses are cited around ~19% of market cap, which implies broad holder pain and a low threshold for selling on rallies. This matters for market structure because it creates a tight loop: upside attempts trigger supply, supply reinforces the range, and the range keeps sentiment cautious.

Institutional positioning has also left a visible imprint on ownership and liquidity. Spot ETF balances are experiencing their largest drawdown of the cycle, around ~100K BTC since the October peak, reinforcing how directly ETF behavior can affect marginal demand. At the same time, cumulative inflows are still cited as historically large, still above $50B, which is an important nuance. The longer-term institutional presence remains meaningful, but the near-term flow is acting as a headwind.

Finally, the network and mining backdrop is strong but not automatically bullish for price in the short term. Network difficulty is cited up about ~15%, and hashrate up more than ~25% from recent lows. That reinforces long-term network security, but it can also raise the cost base for miners, which becomes relevant if price fails to recover and miners need to fund operations into a thin liquidity environment.

Pulling it together, on-chain is best read as a two-way process. Large-holder related flow looks heavy, losses remain widespread, and overhead supply is still active, but accumulation is building in the mid $60Ks and ownership is gradually broadening. That is consistent with a slow reset, not a clean trend.

Macro and Liquidity Context

The macro framing this week is disinflation in parts of the world, but not enough policy flexibility to create easy liquidity, paired with clearer signs of growth pressure and more defensive positioning.

Disinflation is visible such as Japan CPI falling to around ~1.5% YoY, below expectations. In the U.S., inflation is described as sticky enough to keep the Fed constrained, with Core PCE near ~3%, which is still above target. That combination tends to keep policy cautious, even as growth momentum softens.

Growth pressure is more explicit, U.S. GDP is cited around ~1.4% versus expectations near 3%, signaling a meaningful slowdown.

At the same time, U.S. 10-year yields moving toward ~4%+ tightens financial conditions and raises the hurdle rate for risk-taking. This is the environment where markets become more sensitive to negative surprises, because there is less confidence that policy will quickly step in to cushion volatility.

Positioning signals point the same way. The equity put/call ratio is around ~1.28, which reflects a shift toward protection and a more defensive posture from equity traders.

Market internals also look unstable, with an unusual divergence where roughly ~54% of S&P 500 stocks are described as overbought while ~27% are simultaneously oversold. That kind of dispersion often shows up when leadership is narrow and participation is fragile.

Housing adds to the growth pressure. Pending home sales falling to a new all-time low reinforces how rate-sensitive demand remains and how higher yields transmit into the real economy. Household cost pressures are also highlighted in the data, with housing-related costs outpacing wage growth since 2020, which can weigh on consumption and sentiment over time.

Cross-asset allocation signals are consistent with a more cautious global posture. Rotation away from the U.S. has pushed the U.S. share of flows to the lowest level since 2020.

A sharp internal equity divergence is also visible, with the S&P software sector trading below its 200-day average while semiconductors remain near cycle highs, described as a record spread. That supports the idea that risk appetite is selective, not broad.

Finally, fiscal and liquidity uncertainty matters at the margin. The data highlights large potential Treasury refund obligations, which can shape expectations around financing needs and liquidity management. For BTC, the practical implication is straightforward: when financial conditions are tight and risk positioning is defensive, a real demand impulse is usually required to break a range. Otherwise, markets tend to trade in bands and react sharply to flows.

What Matters Now & Looking Ahead

The market is still stuck between structural repair and ongoing distribution, and the range is expressing that balance.

First, watch whether ETF outflows remain persistent. A single inflow day would not change the picture, but a reduction in the consistency of outflow days would. If flows stay negative, rallies into the upper end of the range are more likely to fade than to develop into continuation.

Second, watch behavior near $70K. The flow and realized profit profile suggests profit-taking is still sufficient to trigger rejection there. For the ceiling to soften, either realized profit intensity needs to keep declining, or a stronger bid needs to appear through spot flows.

Third, the on-chain split matters. If whale-related exchange activity stays elevated while long-term holders and smaller wallets continue to accumulate, the most likely outcome is continued sideways trade with sharp, short-lived dislocations. That is what redistribution looks like when liquidity is thin.

That wraps up this post—we hope you found the insights valuable. See you next week, anon! 🚀