Bitcoin (BTC) is experiencing a pause in positive momentum following its rally to an all-time high (ATH). Investors have been selling for weeks, but the market is seeing signs of seller exhaustion.

However, on-chain research firm Glassnode says the market structure of the leading cryptocurrency is still fragile, and this makes BTC vulnerable to further declines.

Sellers Are Getting Exhausted

The momentum pause is evident in data across Bitcoin’s spot, futures, options, and exchange-traded funds (ETFs) markets. These sectors show that investor risk appetite is moderating, there is cautious positioning, and liquidity is thinning after a period of euphoria.

Analyzing the spot market, Glassnode found weakened conditions, with the Relative Strength Index (RSI) falling from 47.4 to 35.8. The RSI is now below its low band, signaling oversold territory. Spot Cumulative Volume Delta (CVD) reflects intensifying selling pressure and has declined sharply from -$107.1 million to -$220 million.

Additionally, spot volume levels reflect declining liquidity and softer investor participation, plunging from $8.4 billion to $7.5 billion.

For the futures market, Bitcoin open interest has slipped from $45.6 billion to $44.9 billion, highlighting a mild position unwinding. Glassnode found that long-side funding fell 33% to $3.1 million, while perpetual CVD declined from -$1.2 billion to -$1.8 billion. This dynamic underscores a pullback in leveraged bullish demand, distribution, and disengagement among market participants.

Bitcoin ETFs on Outflow Streak

Furthermore, the options market shows Bitcoin open interest tumbling 8.4% to $39.8 billion, with the volatility spread narrowing from 23.84% to 16.26%. There is reduced speculative activity among investors, and less risk is being priced in. Notably, there is high demand for downside protection and rising hedging sentiment, as seen in the 25 Delta Skew rising above its high band to 5.51%.

Bitcoin ETFs have been on an outflow streak for the past four trading days. Their net inflows have sunk 25% to less than $270 million, a figure below the low band. This signals weak institutional demand.

“On-chain fundamentals were mixed: active addresses rose 3.6% to 729k, while transfer volume dropped 13.9% to $9.4B and fees declined 14.4% to $483.2K, signaling quieter network activity,” Glassnode added.

While momentum continues to cool off, the Bitcoin market is retesting the low-liquidity range below the $114,000 threshold. Oversold conditions and seller exhaustion suggest a bounce may be on the way; however, growing fragility may give room for negative triggers and delayed recovery.