Bitcoin Struggles as On-Chain Activity Signals Weak Network Adoption

Bitcoin (BTC $109,706) rebounded from early Asian-session lows near $108,760 to above $110,000, but analysts warn that the prospects for a sustained recovery remain limited. On-chain metrics point to weak network adoption, suggesting the market may lack underlying strength.

“The price momentum is weakening with RSI near oversold territory and a bearish MACD,” said Timothy Misir, head of research at BRN. “Spot CVD at –$199 million shows sellers in control, while Daily Active Addresses fell to 692K, indicating weaker network participation.”

The broader crypto market also remains under pressure, with the CoinDesk 20 and CoinDesk 80 indices down 2% and 1.7% over the past 24 hours.

Derivatives Positioning

Leveraged bulls have been hit hard, with $940 million in crypto futures liquidated over the past day, including $800 million in long positions. Ether accounted for $320 million of the total liquidations. Despite this, BTC open interest (OI) remains elevated near all-time highs above 740K BTC, while ETH OI has slightly pulled back to 14 million from 14.6 million.

Other major tokens, including SOL, XRP, DOGE, ADA, and LINK, also saw OI declines, reflecting net capital outflows. Funding rates remain positive across most tokens, excluding SHIB, ADA, and SOL, indicating long positions still dominate sentiment.

CME-listed BTC futures OI fell to 137.3K from 145.2K, showing muted institutional activity, though options OI has continued climbing to its highest since late May. ETH futures OI remains near record levels at 2.05 million ETH, with options OI now the largest since September last year.

Deribit’s upcoming multibillion-dollar expiry on Friday is skewed toward BTC puts, signaling expectations of further downside, while ETH expiry looks more balanced. OTC flows at Paradigm have been mixed, featuring BTC put buying and spreads, alongside ETH calls and risk reversals.

NFT Market Update

NFT blue-chip collections faced steep weekly losses as ETH pulled back from record highs, with many flagship projects losing more than 10% in floor price.

• Pudgy Penguins: down 17% to 10.32 ETH
• Bored Ape Yacht Club (BAYC): down 14.7% to 9.59 ETH
• Doodles: down 18.9% to 0.73 ETH
• Moonbirds: down 10.5%
• Lil Pudgys: down 14.6%
• CryptoPunks: only down 1.35%, showing defensive resilience

Despite falling floors, trading volume remained strong. Pudgy Penguins led with 2,112 ETH ($9.36M), followed by Moonbirds (1,979 ETH), CryptoPunks (1,879 ETH), and BAYC (809 ETH).

Overall NFT market capitalization dropped nearly 5% to $7.7 billion from a peak of $9.3 billion on Aug. 13, highlighting how quickly capital exits when ETH weakens. The contrast between resilient CryptoPunks and weaker newer collections reinforces its status as a defensive, collateral-grade NFT asset. Analysts note that NFT blue chips largely remain high-beta ETH proxies, with only legacy projects like CryptoPunks offering relative safety for long-term institutional investors.