Bitcoin Rally on Shaky Ground as On-Chain Demand Lags, Glassnode Reports

Bitcoin‘s positive start to 2026, which saw its price climb to $95,000 following a fourth-quarter downturn, may not have the strength to continue its ascent, according to analytics firm Glassnode.

In a new report, the firm stated, “Bitcoin is exiting its corrective phase and entering a fragile consolidation regime.” Glassnode noted that while institutional participation and flows are improving, “structural on-chain demand remains moderate.”

Momentum conditions have started to recover, with the relative strength index (RSI) bouncing into the upper neutral zone. This signals a renewed buildup of bullish momentum, Glassnode detailed.

Activity in the spot market shows a significant reduction in selling aggression, while spot volumes have expanded modestly. According to the firm, this points to improving liquidity without signs of speculative excess.

BTC spot volume shows a recovery in 2026. Source: Glassnode.

Investment Slowly Returns

Bitcoin’s derivatives markets are rebuilding their positioning in a controlled manner. Open interest in futures has risen slightly, while long-term funding pressure has cooled considerably.

This movement “reflects a moderation of bullish leverage rather than a capitulation,” Glassnode said. Perpetual futures have decisively returned to net buy-side dominance, highlighting a resurgence of conviction and early accumulation.

Open interest rose 2.5% to $30 million after its decline. Source: Glassnode.

Meanwhile, options markets have aggressively de-risked. Open interest has contracted and volatility spreads are exceeding their upper statistical bands, which Glassnode interprets as a sign of high uncertainty and increased expectations for short-term volatility.

Flows into U.S. spot exchange-traded funds (ETFs) have also turned positive, signaling renewed institutional demand. However, Glassnode warns this “also introduces a growing risk of short-term profit-taking by TradFi participants.”

Mixed Fundamentals Persist

The firm summarizes bitcoin’s on-chain fundamentals as “mixed.” Network activity has improved, with active addresses and transfer volumes expanding, but fee pressure remains moderate, suggesting congestion has not yet returned.

In contrast, realized capital growth remains “deeply negative,” pointing to persistent net capital outflows and subdued structural demand. “Supply dynamics remain skewed towards short-term holders, with active capital participation remaining near cycle highs, which increases sensitivity to short-term price movements,” the report added.

The Realized Cap Change, which measures bitcoin inflows/outflows on the network, shows a predominance of outflows. Source: Glassnode.

Profitability metrics continue to recover gradually. A growing portion of the supply has returned to profit, unrealized losses are decreasing, and realized loss-taking pressure has dropped sharply, indicating a slow improvement in holder confidence.

This combination of factors leaves the bitcoin market sensitive to volatility and the risk of profit-taking as it attempts to establish higher ground.