Glassnode flags late-cycle signals as Bitcoin leverage hits record

The Week 33 report from Glassnode finds new highs in altcoin futures, a $67B Bitcoin open-interest tower, and shrinking inflows just days after BTC set a $124.4K peak. Traders pushed leverage hard, yet profit-taking volumes fell below past ATH phases.

Numbers behind the Web3 noise

Capital inflows slowed to +6% per month versus +13% during the first $100K breakout. The price dipped 9.2% to $112.9K soon after, showing demand fatigue at lofty levels. Open interest (OI) across BTC futures sits near $67B, while altcoin contracts briefly topped $60B – almost parity. A $2.6B flush made the 10th-largest daily OI drop on record.

Ethereum now commands 67% of perpetual volume, its highest share ever, and controls 43% of futures OI. That move signals a new altcoin season pivot as traders slide down the risk curve. However, bellwether flips like this often front-run sharp pullbacks. Long-term holders book most of the profit, short-term wallets stay quiet, hinting at diamond hands – or complacency.

Realized price finally climbed above the 200-week moving average at $51.9K, a level that marked bull-run starts in 2017 and 2021. Profit-taking looks muted: daily realized gains stayed under $750M despite fresh highs, well below the January $2B peaks. Bulls cheer, yet late-cycle analogs warn the crossover can also precede exhaustion.

Exchange reserves fell to 14.5%, the lowest since 2018. A separate study shows the ratio already slipped below 11% earlier in June. Less float sounds bullish, but thin floats plus high leverage can turn a dip into a spill.

CoinGlass dashboards still tally over $37B in perpetual OI even after liquidations. Yahoo Finance futures quotes echo elevated positioning across August contracts.

Late-cycle or just a Bitcoin on pause?

Glassnode tracks 273 straight days with more than a standard deviation of BTC supply in profit – second only to the 2015-18 stretch. Cycles peaked two-to-three months after this marker in earlier eras, putting today uncomfortably close to history’s edge. Long-term holders already realized more profit than every past cycle except 2017. If they start selling harder, thin exchange books may wobble.

Yet realized losses at $112M per day remain routine, not panic-level. Investors still stomach the pullback, suggesting conviction holds. Leverage liquidations stayed modest: $74M shorts during the ATH and $99M longs on the slide – well under 2024 blow-offs. That hints traders used stops, not hope.

Open-interest dominance shows Bitcoin at 56.7% and Ether at 43.3%. A flip would shout “alt-euphoria,” but we’re not there – yet. If spot funds reload, the bull could stagger on. The hedge? Dry powder. Capital inflows may revive. ETFs absorbed supply through July, helping push BTC to new highs, though inflows cooled this month.

Outlook: three paths

1. Soft landing. Leverage bleeds off, BTC bases above $110K, realized price rises. Exchange supply stays tight, ETFs trickle in fresh bids. Cycle extends into 2026. Probability? Maybe 40%.
2. Sharp flush. Altcoin OI snaps again, dragging BTC below $100K, liquidations spike past $300M daily. Thin reserves amplify moves. Similar events wiped 15% in hours before; repetition isn’t destiny, but it’s familiar.
3. Sideways grind. Profit-taking inches up, realized price flattens, and leverage darts between bursts. This scenario fits slowing inflows and low panic. Could bore everyone through Q4.

However, macro shocks (Fed policy, ETF outflows) can tilt odds fast. One big treasury sell order can jar thin books, a lesson from prior flash wicks.

Glassnode’s Week 33 readout paints a maturing bull: record leverage, shrinking inflows, and drained exchange stacks. Bulls tout realized-price strength and scarce supply; bears eye inflated futures and late-cycle profit prints. But remember: markets reward patience and punish comfort.