OverviewBitcoin endured a sharp drawdown last week, sliding from $115K to a low of $104K in just four days. This was a fast and decisive flush that shook out weaker hands and triggered a defensive rotation across the market. Price has since bounced, climbing back toward $111K, but the scars from the drop are still fresh. Sentiment remains cautious, and positioning reflects that.Momentum indicators have rolled over. The Relative Strength Index broke down before curling off oversold territory, while cumulative volume delta remains negative, showing ongoing sell-side pressure. Spot volumes contracted into the selloff, pointing to reduced conviction and a thinning bid.Futures markets followed suit. Open interest fell significantly, and funding rates eased back, signaling that traders have moved to de-risk. In the options space, the 25-Delta Skew spiked sharply as demand for downside protection surged. On chain, the short-term holder supply share continues to rise, suggesting that speculative capital is becoming more dominant. This combination of signals points to a market shifting into protection mode, with traders prioritizing capital preservation over directional bets.Profitability metrics echoed the broader mood. The Net Unrealized Profit and Loss Ratio turned negative, showing that unrealized losses now dominate the market. The Realized Profit and Loss Ratio also broke below its lower bound, indicating growing stress and loss realization. Despite this, Realized Cap continues to trend upward. Capital is still flowing into Bitcoin, likely from longer-term participants with higher conviction.In sum, market excess has been cleared out, protection has been bought, and positioning is much cleaner. The bounce off the low is encouraging, but the structure remains fragile. Until confidence rebuilds, expect a market defined more by caution than conviction.Off-Chain IndicatorsOn-Chain Indicators🔗 Access the full report in PDF Don't miss it! Smart market intelligence, straight to your inbox. Subscribe now Follow us and reach out on XJoin our Telegram channelFor on-chain metrics, dashboards, and alerts, visit Glassnode StudioDisclaimer: This report does not provide any investment advice. All data is provided for information and educational purposes only. No investment decision shall be based on the information provided here and you are solely responsible for your own investment decisions.Exchange balances presented are derived from Glassnode’s comprehensive database of address labels, which are amassed through both officially published exchange information and proprietary clustering algorithms. While we strive to ensure the utmost accuracy in representing exchange balances, it is important to note that these figures might not always encapsulate the entirety of an exchange’s reserves, particularly when exchanges refrain from disclosing their official addresses. We urge users to exercise caution and discretion when utilizing these metrics. Glassnode shall not be held responsible for any discrepancies or potential inaccuracies. Please read our Transparency Notice when using exchange data.