glassnode: Despite the rebound, market sentiment remains cautious

BlockBeats News, October 21st, glassnode released a research report pointing out that Bitcoin experienced a sharp decline last week, plummeting from $115,000 to a low of $104,000 in just four days. This rapid and decisive decline shook out weak hands and triggered a defensive rotation across the entire market. Subsequently, the price rebounded to $111,000, but the scars of the crash were still visible. Market sentiment remains cautious, and positions reflect this.

Spot trading volume shrank during the sell-off, indicating a decrease in market confidence, with buying pressure gradually diminishing. Open interest in the futures market saw a significant drop, funding rates declined, indicating that traders have shifted to a risk-off stance. In the options market, as the demand for downside protection surged, the 25 Delta skew spiked. On-chain, short-term holder supply continued to rise, indicating that speculative capital is becoming more dominant. These signals suggest that the market is shifting to a protection mode, with traders prioritizing capital preservation over directional bets.

In conclusion, excess market funds have been flushed out, protective assets have been bought, and positions have become clearer. While the bounce from the low point is encouraging, the market structure remains fragile. Until confidence is rebuilt, the market will be more driven by caution rather than strong conviction.