Bitcoin spot trading volume measured in BTC has fallen to its lowest level since 2019, leaving the market with less liquidity and a weaker foundation for sustained price moves. Glassnode data shows the slowdown extends across exchange flows, derivatives activity and order-book depth, while short-dated U.S. Treasury yields remain above the returns available through common Bitcoin cash-and-carry trades.
The combination places Bitcoin in a market environment where taking directional crypto risk has become harder to justify for yield-focused traders. Three-month Bitcoin futures basis — the annualized premium earned by buying spot Bitcoin and selling futures — has remained below the two-year U.S. Treasury yield since February, according to Glassnode. The last comparable stretch ran from August 2022 to January 2023, near the low point of the previous market cycle.
Bitcoin’s decline in activity is particularly visible when trading is measured in coins rather than dollars. Dollar-denominated volume can rise simply because Bitcoin’s price rises, while BTC-denominated volume better reflects the number of coins changing hands. On that basis, current spot activity is at its weakest in roughly seven years.
Treasury yields exceed bitcoin basis returns
The yield backdrop has shifted as U.S. rate expectations have moved away from cuts and toward the possibility of higher rates. The two-year Treasury yield has remained above the federal funds rate since April, with the gap reaching its widest level since November 2022, according to the market data cited by Glassnode.
That configuration suggests bond traders expect policy rates to remain higher for longer, or potentially rise. For Bitcoin markets, the effect is more immediate in relative-return strategies. A trader using a cash-and-carry trade accepts custody, execution and market-structure risks to capture a futures premium. When a two-year Treasury offers a higher yield, the appeal of that trade declines.
This does not mechanically dictate Bitcoin’s price direction, but it reduces one source of demand that has supported spot purchases during periods of elevated futures premiums. Lower basis can also signal that derivatives traders see less urgency to pay up for leveraged long exposure.
The subdued appetite has appeared alongside a stronger U.S. dollar. Since May, Bitcoin has delivered one of its weakest responses to a rising dollar among roughly 20 comparable episodes since 2015, Glassnode said. Bitcoin had typically moved into positive territory by this stage of prior dollar upswings; in the latest episode, it remained negative, placing the performance among the three weakest outcomes in that sample.
Price sits in a heavily owned $62,000 to $68,000 band
Bitcoin is trading within its largest on-chain cost-basis cluster, concentrated between $62,000 and $68,000, according to Glassnode. Cost basis estimates the average acquisition price of coins held by market participants, creating zones where holders may be more likely to defend positions, take profits or sell to reduce losses.
The current range is divided broadly between short-term holders who acquired Bitcoin during this year’s decline and long-term holders who retained coins through the drop. That ownership structure gives the band unusual relevance: it contains both newer buyers with relatively recent exposure and older holders whose positions have been tested by the correction.
Above the market, short-term holder cost basis is around $69,000, creating a nearby area where recent buyers could sell into a recovery. Glassnode identified another overhead supply cluster between $83,000 and $86,000 associated with long-term holders. Those levels do not function as fixed barriers, but they indicate where a larger number of coins may be held at or near break-even.
Order-book data shows demand has been accumulating below spot. Buy orders placed between 2% and 20% beneath the market have increased since early June. Sell-side liquidity in the equivalent range above spot has declined to near the lowest level of the past month.
Thin sell-side depth can allow a sharp recovery if new demand arrives, since fewer resting offers would need to be absorbed. The same thin liquidity can also produce abrupt moves in either direction, particularly when spot volume remains low and derivatives positioning shifts quickly.
ETF flows and exchange activity have lost momentum
Exchange deposits and withdrawals have both slowed to moderate levels, putting combined activity among the quietest periods of the past three years, Glassnode reported. Bitcoin balances on exchanges rose gradually from an April low before flattening in early July.
Slower deposits can reduce immediate potential selling pressure, while slower withdrawals suggest less active accumulation into self-custody. With both measures subdued, the data describes a market with limited conviction rather than a clear directional transfer of coins.
U.S. spot Bitcoin ETF flows briefly improved in mid-July before returning to slightly negative territory within a week. The renewed outflows were small relative to the redemption wave seen in June and early July, according to Glassnode. ETF demand therefore appears softer than it was during the mid-July rebound, but without matching the more forceful selling seen earlier in the summer.
Bitcoin also lagged equities over the past week. After outperforming major stock indexes and absorbing an oil-related shock in the previous week, Bitcoin declined while U.S. and European equity markets were largely flat. The break in the asset’s recent co-movement with stocks began on Monday, Glassnode said.
Options markets show cheap protection and muted expectations
Options positioning changed around Bitcoin’s late-July local high. The cost of downside protection fell close to zero on July 21, the day Bitcoin reached a local peak after rebounding from June lows. Hedges sold near that high began to return within a week as the price pulled back.
The volume put-to-call ratio, which compares traded bearish put options with bullish call options, reached a year-to-date low before climbing sharply during the decline. Meanwhile, perpetual futures funding rates stayed below neutral throughout the month, indicating that leveraged positioning did not become heavily skewed toward long exposure.
Implied volatility, the options market’s estimate of future price movement, remained compressed across maturities. Six-month implied volatility was near levels rarely seen lower in the available historical range. Cheap options can make hedging less expensive, but low premiums also reduce the income available to traders selling options and taking on the obligation to buy or sell Bitcoin at preset prices.
Glassnode’s Bitcoin Vector model remained in a “risk off” state, though above the model’s capitulation zone. The firm characterized the setup as a tactical pause rather than a full capitulation event. Its framework would look more constructive if Bitcoin moved above $69,000 with volume support and renewed ETF buying, while a loss of the $62,000-to-$68,000 cost-basis band alongside rising exchange inflows would weaken that view.
Historical drawdown measures offer a mixed picture. Bitcoin’s deepest discount relative to its 200-day moving average has remained shallower than in previous bear-market episodes, and peak-to-trough declines have also been less severe. Yet Bitcoin has spent roughly three-quarters as long below its 200-day moving average as it did in typical earlier bear markets, leaving the downturn shorter in duration even if activity has become unusually quiet.
With spot liquidity thinning and volatility compressed, learn how to adapt your approach in Bitcoin trading strategies for success in 2025.
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