Bitcoin (BTC) Faces Liquidity Challenges Amid Fragile Market Conditions
Felix Pinkston Nov 27, 2025 02:44
Bitcoin struggles in a tight $81K–$89K range as liquidity wanes. Realized losses surge, with futures and options markets adopting cautious stances, according to Glassnode.
Bitcoin (BTC) finds itself in a precarious position, trading within a narrow $81K–$89K range as liquidity diminishes and realized losses mount, according to Glassnode. The cryptocurrency's market dynamics echo the weaknesses observed in early 2022, with futures markets showing signs of deleveraging and options markets maintaining a defensive stance.
On-Chain Insights
Bitcoin's price has been under pressure since it fell below the short-term holder cost basis of approximately $104.6K in October. The current trading range mirrors a similar period in Q1 2022 when the market was characterized by waning demand and liquidity. The Entity-Adjusted Realized Loss has surged to $403.4 million per day, surpassing previous lows and indicating a significant erosion of market confidence.
The Short-Term Holder (STH) Realized Profit/Loss Ratio has collapsed to 0.07x, highlighting a stark dominance of losses over profits among recent investors. This suggests that liquidity is evaporating, and the market could potentially break below the True Market Mean of around $81K if conditions do not improve.
Off-Chain Dynamics
In the derivatives markets, futures open interest continues to decline alongside Bitcoin's price, indicating a controlled unwinding of leverage without the panic of forced liquidations. This reflects a cautious stance among traders, who are opting for a risk-off approach.
Options markets have seen a rise in open interest, particularly in BTC terms, due to increased volatility and demand for risk management. However, the distribution of options interest shows a heavy concentration of puts near $84K and calls around $100K, suggesting limited confidence in a sustained upward move.
Market Outlook
The broader market sentiment remains cautious, with Bitcoin's price unable to reclaim key cost-basis levels. Both on-chain and off-chain indicators point to a market in a state of defensive consolidation, with liquidity remaining thin and demand weak. The upcoming December expiry in the options market is seen as a potential volatility event, which could further influence market dynamics.
Overall, Bitcoin's current trajectory suggests it is not in full capitulation but continues to face significant challenges in regaining momentum. Until there is a resurgence in demand and price recovery above critical levels, the market is likely to remain in a low-liquidity, low-conviction phase.
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