Bitcoin Climbs Above $66,000 as ETF Flows Recover but Glassnode Warns of Higher Volatility

Bitcoin has climbed above $66,000, while spot Bitcoin ETF flows point to a gradual return to accumulation following several weeks of almost uninterrupted selling. More importantly, the price has broken above the $65,000 area and moved back above the 50-day exponential moving average (EMA50), improving the short-term technical outlook.

Interestingly, buying activity has also strengthened across the precious metals market, potentially signaling renewed interest in assets that are historically negatively correlated with the U.S. dollar and that experienced heavy selling pressure in recent months. From a technical perspective, the $64,000-$65,000 zone now represents the first major support level for Bitcoin, followed by the $57,000 area, where previous buying interest emerged.

What Does Glassnode See?

According to Glassnode, Bitcoin has entered a consolidation phase after rebounding from levels below $58,000. While the broader uptrend remains intact, momentum has begun to slow, and relatively muted spot trading volumes suggest that investors are still looking for stronger confirmation that the recovery is sustainable.

At the same time, positioning in the derivatives market has become less defensive. Open interest in futures and options continues to rise, perpetual futures traders have shifted back to a net-long position, and demand for downside protection has declined. However, Glassnode notes that leverage is being rebuilt cautiously, as funding rates remain relatively low and do not yet indicate an overheated market.

The firm's analysts also believe institutional selling pressure may be fading. They point to improving inflows into U.S. spot Bitcoin ETFs and the fact that many ETF investors are moving back toward breakeven. Overall capital inflows, however, remain cautious, as reflected by the continued contraction in monthly realized capitalization.

The biggest risk, according to Glassnode, is the changing composition of market participants. An increasing share of capital is now held by short-term investors who tend to react more aggressively to price fluctuations and shifts in momentum. This means Bitcoin continues to benefit from support provided by long-term holders and strong investor profitability, but future rallies and corrections could become significantly more volatile.

Glassnode concludes that the market remains fundamentally resilient but is becoming increasingly sensitive to weakening momentum and renewed selling pressure. The firm also notes that long-term holders have become less aggressive in realizing losses, although there is still no definitive confirmation that Bitcoin has established a durable market bottom.

Bitcoin Technical Outlook (D1 Chart)

If a new bearish impulse were to emerge from the $66,000-$70,000 resistance zone, a third major downward leg could theoretically extend toward $45,000. Notably, both during the winter correction and again in April, Bitcoin briefly reclaimed the EMA50 before resuming its decline, suggesting that a move above the moving average alone may not be sufficient to confirm a lasting trend reversal.

Source: xStation5