Bitcoin (BTC) trades around 104.5k, down 2% each week amid fears of market uncertainty and the Middle Eastern tensions. Cryptoquant warns that BTC could revisit $92,000 or $81,000 if demand continues to decline. GlassNode views “quiet” blockchain as network maturity, and institutions promote large value transfers.
Bitcoin (BTC) is steadily trading above $104,500 as Asian trading week begins to rise.
Despite the ominous backdrop of potential looming wars in the Middle East, major cryptocurrencies remain relatively flat on days when price movements can be neglected.
In fact, Bitcoin has only dropped by 2% over the past week, according to data from Coindesk Market.
However, this obvious calm has prompted a fierce debate among market analysts. Is this a sign of fundamental strength, or is there a more unstable brewing underneath the surface?
Three new reports released this week by the well-known Crypto Analytics Firms Cryptoquant and GlassNode, as well as trading company Flowdesk, all paint similar pictures of current surface conditions for low volatility, harsh price action, and suppressed on-chain activity.
Notable changes in market dynamics are also apparent. Retailer participation reportedly is declining, but it is increasingly shaping the structure of market flows, from Bitcoin ETF investors to large “whale” holders.
However, the most urgent warning notes are heard in encryption.
In a June 19 report, the company argued that if the current trend in demand continues, Bitcoin could soon reconsider its support level of $92,000 or potentially fall as low as $81,000.
According to Cryptoquant, spot demand for Bitcoin is still rising, but it does so at a rate well below established trends. Inflows to Bitcoin ETFs reportedly have fallen by more than 60% since April, with whale accumulation halving in the same period.
Additionally, short-term holders, which are usually new market participants, have emitted about 800,000 BTC since late May.
Cryptoquant’s demand momentum indicator tracks the purchasing intensity of direction across the major investor cohort and reads negative 2 million BTC, the lowest level recorded in the company’s dataset.
GlassNode counterpoint: Mature network, not relaxed
GlassNode arrives at a much more disastrous conclusion, admitting a similar on-chain signal.
The weekly on-chain update acknowledges that the Bitcoin blockchain is now “quiet.” This means that transaction counts are reduced, network fees are minimal, and miners’ revenues are curtailed.
However, GlassNode assumes that this does not necessarily indicate weakness, but may instead reflect the ongoing evolution of the network.
They point out that although the sinking volume in the chain remains high, it is increasingly concentrated on the movement of large value.
This suggests that Bitcoin blockchain is gradually being used by institutions and whales for important transactions rather than smaller everyday retail activities.
Additionally, GlassNode points out that the derivatives market is currently running war on the activities on the chain, with the volume of futures and options regularly exceeding the volume of spot markets 7-16 times.
They argue that the change has resulted in more refined hedging strategies, better collateral management practices, and a more mature market structure overall.
The rise of Crypto Treasury Companies: New Financial Engineering?
Adding another layer to the evolving market structure, a new report from Presto Research argues that the Ministry of Cryptocurrency (CTC) is not just using Bitcoin ETFs, including Michael Sayler’s MicroStrategy (current Strategy) and Japan’s Metaplanet.
Presto suggests that it represents a new form of financial engineering that could take less risk than many investors would expect.
The latest capital raises in a strategy that secured nearly $1 billion through permanent preferred stocks demonstrates how to leverage Bitcoin’s inherent volatility for issuer benefits.
These securities, together with convertible bonds and stock sales in the market, allow CTCs to fund their aggressive crypto accumulation strategies without causing margin risks normally associated with leveraged positions.
Presto points out that the strategy’s Bitcoin holdings are not supplemented and Metaplanet bonds are not collateralized.
This means that these structures have little collateral liquidation, the main trigger for past crypto industry explosions such as Celsius and the Three Arrow Capital.
This does not completely eliminate risk, but fundamentally changes its nature.
It argues that the real challenge for CTCs is not the cryptographic exposure itself, but the discipline required to effectively manage dilution, cash flow and capital timing.
Metaplanet’s “Bitcoin Yield” metric, which measures BTC per fully diluted share, reflects this important focus on providing shareholder value.
As long as CTC can skillfully manage the financial mechanics behind its accumulation strategy, Presto believes it will continue to acquire Net Asset Value (NAV) premiums, just like traditional market high-growth companies.
But if they miscalculate, the very tool that drives their rise can easily accelerate their fall.
