Dormant BTC activity fell to its lowest level since Q3 2022, suggesting long-term holders have slowed distribution after heavy profit-taking.
Spot market conditions for Bitcoin are showing early signs of improvement with increased trading volume and decreasing sell-side pressure, according to analysts from Glassnode.
There has been a “modest” lift in spot Bitcoin (BTC) trading volume, “while the net buy–sell imbalance has broken above its upper statistical band,” reported Glassnode on Monday.
This is signaling a “clear reduction in sell-side pressure,” but despite this, spot demand “remains fragile and uneven,” it added.
Bitcoin declined almost 3% from its weekend high of $95,450 to trade at around $92,550 at the time of writing as markets continue to digest the fallout from the latest escalation in the US/EU trade war.
The asset remains up 6% since the beginning of the year.
“Overall, Bitcoin remains in consolidation, but internal conditions are improving,” said Glassnode, adding that markets are gradually rebuilding.
“While defensive positioning persists, strengthening buy-side dynamics and renewed institutional interest suggest a gradual rebuild toward a more constructive market structure.”
Bitcoin treated as portfolio hedge
Gracie Lin, CEO at OKX Singapore, told Cointelegraph on Tuesday that the report suggests the market has absorbed much of the late-2025 profit-taking and that sell-side pressure is easing.
“Long-term holders appear less inclined to sell into every rally, while ETF flows continue to show institutions buying pullbacks,” she said.
“With fresh tariff headlines, softer growth signals across parts of APAC, and record gold prices in the background, that strengthens the case for Bitcoin being treated less as a short-term trade and more as a portfolio hedge — even as volatility remains a feature of the asset.”
Related: Bitcoin futures OI rebounds 13% as analysts see cautious return of risk appetite
Liquidity decline precursor for a rally
Analysts at Swissblock said the decline in Bitcoin network growth and a recent liquidity drain resemble conditions last seen in 2022.
Similar network levels back then “triggered a BTC consolidation phase as network growth began to recover, even while liquidity remained weak and bottomed out,” they added.
“History shows that the subsequent surge in both metrics fueled the major bull run,” said Swissblock.
Magazine: Wintermute on crypto recovery, BTC allocation cut on quantum risk: Hodler’s Digest
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Key takeaways:
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Bitcoin price stabilized after US regional banks posted stronger-than-expected earnings, easing credit fears.
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One analyst predicted Bitcoin’s bull run could end in 10 days.
Bitcoin (BTC) fell more than 5% to trade below $105,000 on Friday, extending a two-day decline as renewed US banking stress rattled risk markets and revived concerns over broader financial stability. On Friday, US banking stocks showed signs of resilience, and global market sentiment steadied pre-market.
However, BTC continued to struggle near $105,000, not benefiting from improved risk appetite after regional lenders delivered stronger-than-expected earnings, easing fears of a wider credit contagion.
The latest shift in sentiment came after several key regional lenders, including Truist Financial, Regions Financial and Fifth Third Bancorp, reported lower provisions for credit losses than anticipated. The results offered relief to markets following Thursday’s rout, when the S&P Regional Banks Select Industry Index fell 6.3%, led by Zions Bancorporation and Western Alliance Bancorp after both disclosed loan losses stemming from fraud in distressed commercial mortgage funds.
The upbeat earnings helped the S&P Regional Banks Index claw back losses, with Zions Bancorp rebounding over 6%, Truist Financial rising 2%, and Western Alliance up 1.6% in early trading.
European financials, including Barclays and Deutsche Bank, pared earlier losses, while Asian lenders like Mizuho Financial and Sumitomo Mitsui also steadied after heavy selling.
RBC Capital Markets said that regional banks “remain well reserved for potential losses” and have bolstered capital since 2023, suggesting the recent sell-off may have been overdone.
Related: How low will Bitcoin go? Regional US ‘bank stress’ pushes BTC toward $100K
Trump’s tariff comments boost optimism
Adding to the improved tone, US President Donald Trump confirmed that steep tariffs on Chinese goods “will not persist” and announced plans for a summit with Chinese President Xi Jinping in two weeks. The statement, following Beijing’s willingness to collaborate on trade disputes, sparked a rebound in global markets, with US stock futures up 1.2%.
BREAKING: S&P 500 futures erase losses as President Trump says high tariffs on China will NOT remain.
Futures are now +75 points from their overnight low. pic.twitter.com/4cfnVAzCNX
— The Kobeissi Letter (@KobeissiLetter) October 17, 2025
Market observers said the tone of risk sentiment had turned notably calmer. Cointelegraph reported earlier this week that the latest crypto and equity pullbacks “do not have long-term fundamental implications,” suggesting that the market is moving through short-term volatility rather than systemic distress.
However, some analysts caution that Bitcoin’s current bull cycle may be nearing its end. Analyst CryptoBird said in an X post that the Bitcoin “bull run ends in 10 days,” basing the forecast on historical cycle patterns.
Related: Bitcoin ‘bull run is over’, traders say, with 50% BTC price crash warning
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
