Cryptocurrency Bitcoin Exhibits a Recovery This Week, Yet Glassnode Presages Potential Future Struggles
Bitcoin Market Shows Signs of Correction After Reaching All-Time High
In the past week, the Bitcoin market has experienced a correction after reaching an all-time high of over $124,000 in mid-August 2025. The current trading range is around $114,000–$114,000, according to the latest Glassnode report and related analyses.
The Funding Rate specifically for long positions declined by 2% to $2.9 million, hinting at a cooling bullish sentiment, but demand for these positions remains high. This decrease could be a sign of traders taking profits, a common occurrence in a late-stage bull cycle.
The Relative Strength Index (RSI) has cooled off, signaling weakening short-term momentum after the peak. The RSI has increased to 47.5, marking a 14.5% gain, but is still below the midpoint, requiring caution as the momentum needs to hold to confirm the trend.
On-chain transfer volume has slightly dropped from $8.6B to $8.5B, but remains steady. This decrease in volume could be due to reduced market engagement and fewer participants compared to previous weeks, as the spot volume decreased from $7.3 billion to $5.7 billion, representing a 22% reduction.
However, the spot price of the leading cryptocurrency rebounded strongly, climbing from around $114,000 to approximately $121,000 over the past week. This rebound could indicate a potential reversal of the correction.
Open Interest, the benchmark that measures the total number of active positions, decreased to $44.1 billion from $44.6 billion, indicating a slight reduction in leveraged trading. This decrease in open interest could be a sign of traders closing their positions or reducing their leverage, another common occurrence in a late-stage bull cycle.
The volatility spread has dropped to 10.45% from 31.97%, signaling that traders expect less volatility. This decrease in volatility could be a sign of market participants becoming more cautious and less willing to take on risk.
Despite the correction, realized P/L ratios remain elevated (around 2.4), and 92–96% of on-chain holdings remain in profit, reflecting caution rather than panic. This means that the majority of Bitcoin holders are still in profit, indicating a strong overall sentiment in the market.
In addition, the daily active address count has risen to 793,000, indicating elevated user engagement on the network. This increase in active addresses could be a sign of continued interest in Bitcoin despite the correction.
Overall, the Bitcoin market in late August 2025 shows a classic late-cycle bull market behavior. The interplay of these metrics suggests a fragile but still cautiously bullish market environment approaching the expected peak of the traditional four-year cycle around autumn 2025. Institutional ETF flows show both fatigue and renewed interest, with spot Bitcoin ETFs posting net outflows totaling roughly $975 million over the prior four sessions, but the most recent weekly data from mid-August shows a strong positive ETF inflow of over $880 million. The sustainability of these inflows amid market volatility remains uncertain.
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