Glassnode: Investor Panic Subsides as Bitcoin Stabilizes, Funds Flowing into Bullish Options

Glassnode's latest weekly report points out similarities between the current market conditions and the early stages of the 2022 bear market (also known as the crypto winter). ETF demand continues to weaken, with IBIT seeing outflows for the sixth consecutive week, marking the longest continuous negative flow record since its launch in January 2024, with over $2.7 billion in redemptions over the past five weeks. Derivatives data further confirms a decrease in risk appetite. Open interest contracts have been declining from November to December, indicating a reduced willingness to bear market risks, especially after the October 10th liquidation flash crash event. Perpetual contract funding rates remain mostly neutral, briefly dipping into negative territory, and funding premiums have significantly dropped, suggesting a more balanced market environment with reduced speculation. The options market sentiment is cautious, with investors leaning towards selling rather than chasing upside potential. Earlier this week, as the Bitcoin price approached $80,000, put options dominated, but as the price stabilized, investor panic subsided, and funds flowed into call options.

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