Bitcoin Enters Historic Low-Risk Zone, On-Chain Data Shows

A new report from Santiment highlights a growing divergence between price action, investor sentiment, and key blockchain metrics.

Despite recent volatility, several structural indicators are flashing signals typically associated with late-stage corrections rather than early-cycle breakdowns.

Inflation Cools, But Volume Collapses

The latest CPI print came in softer than expected, with headline inflation at 2.4% and core at 2.5%. While that initially helped risk assets stabilize, Santiment cautions that macro data alone rarely defines long-term crypto trends.

More notable is what’s happening under the surface. Trading volume has dropped 61% week-over-week, signaling exhaustion among participants. Historically, extended periods of low volume often precede major volatility expansions. Markets rarely stay quiet for long.

This drop in activity reflects what analysts describe as capitulation and “analysis paralysis” after months of persistent downside pressure.

Sentiment Remains Bearish

Social metrics show that bearish commentary continues to outweigh bullish views. The bullish-to-bearish comment ratio is sitting around 0.89, meaning negative sentiment still dominates the conversation.

From a contrarian perspective, this type of lingering fear can be constructive. Markets tend to move against the majority view, and sustained disbelief during stabilization phases has historically preceded relief rallies.

Whales Accumulate 18,000 BTC

One of the strongest signals in the report comes from large wallet behavior.

Addresses holding between 10 and 10,000 BTC added approximately 18,290 BTC over the past four days. This cohort is often viewed as “smart money,” and their accumulation contrasts with broader retail activity.

However, smaller wallets are also buying aggressively. Ideally, durable bottoms form when whales accumulate while retail sells in panic. The current mixed dynamic suggests that while accumulation is underway, the market may not have reached a full capitulation phase.

MVRV Points to a Low-Risk Zone

Bitcoin’s 365-day MVRV currently sits at -29%, while the 30-day MVRV is around -10.9%. These deeply negative readings indicate that the average holder is underwater.

Historically, such conditions have marked some of the strongest risk-reward accumulation zones. When both short-term and long-term holders are sitting on unrealized losses, downside risk tends to compress while upside asymmetry grows.

Funding Rates Hint at Short Squeeze Potential

Perpetual futures funding rates have flipped between neutral and negative territory. This means short sellers are paying long traders, reflecting skepticism toward any upside move.
If prices begin to climb while funding remains negative, it increases the probability of forced liquidations from overleveraged short positions. That dynamic could fuel a sharp, volatility-driven move higher.

Exchange Supply Creeps Higher

Not all signals are bullish. Bitcoin supply on exchanges has increased slightly over the past month. While not extreme compared to prior cycle peaks, rising exchange balances typically suggest higher potential sell-side pressure.

Monitoring exchange inflows will be critical. Sudden spikes in deposits often precede short-term corrections.

Ethereum and XRP Show Deep Opportunity Metrics

The report also highlights divergence across major altcoins.

Ethereum continues to see network growth, with total holders surpassing 178 million while staking deposits rise. This suggests investors are locking supply rather than distributing it, a factor that could support price stability over time.

XRP appears even more deeply discounted on-chain, with a 365-day MVRV of -38.5%. Combined with elevated short interest, that positioning creates conditions where a catalyst could trigger a sharp reversal.

Market Reset, Not Euphoria

Santiment’s overall assessment does not point to euphoric recovery. Instead, the data suggests a market in reset mode.

Whales are accumulating. MVRV ratios are in historic opportunity zones. Funding rates reflect skepticism. Sentiment remains fearful.

At the same time, retail participation has not fully retreated, and exchange balances are inching upward – signals that the market may still be working through the final stages of its correction.
With Bitcoin trading below $70K, the battle between accumulation and lingering fear remains unresolved. The next decisive move will likely depend less on headlines and more on whether on-chain conviction continues to build beneath the surface.

The information provided in this article is for educational purposes only and does not constitute financial, investment, or trading advice. Coindoo.com does not endorse or recommend any specific investment strategy or cryptocurrency. Always conduct your own research and consult with a licensed financial advisor before making any investment decisions.

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