Executive SummaryDollar weakness has failed to lift Bitcoin as US 10-year yields climb toward 4.7%, keeping financial conditions restrictive and leaving elevated real yields as the dominant macro constraint on price.Gold near $4.4k and oil in the mid-$80s underline that Bitcoin has not participated in the broader bid for scarce assets, continuing to trade as a liquidity-sensitive risk asset rather than an inflation hedge.Both spot price and the Short-Term Holder Cost Basis at $68.5k sit below the True Market Mean at $75.8k, confirming the capitulation phase where coins change hands beneath the cost basis of recent buyers and the broader active investor base.Relative Unrealized Loss peaked near 0.25 against readings above 0.6 in prior cycles, pointing to a shallower and more distributed drawdown, while the Realized Profit/Loss Ratio at 0.75 remains above the sub-0.5 zone that has historically marked seller exhaustion.Perpetual demand has turned positive and ETF flows have stabilised from their -5k BTC per day trough, but a persistently negative Coinbase Premium and DVOL near the mid-30s indicate spot participation and directional conviction both remain absent.Ready to get ahead of markets and sharpen your foresight? Try Glassnode. Sign up or talk to sales.Explore the Market CompassMacro InsightDollar Weakness Meets Yield PressureMacro conditions remain conflicted for Bitcoin. The DXY has rolled over from its July highs, typically a supportive development for risk assets, yet US 10-year yields have continued climbing toward 4.7%. Bitcoin has so far failed to respond meaningfully to the weaker dollar, remaining anchored near cycle lows around $60–65k.This divergence suggests that elevated real and nominal yields remain the dominant macro constraint, keeping financial conditions restrictive and raising the opportunity cost of holding non-yielding assets. A more constructive backdrop for BTC would likely require the recent dollar weakness to be accompanied by a sustained decline in Treasury yields.Live ChartBitcoin Lags the Hard-Asset BidThe divergence is also visible across hard assets. Gold remains elevated near $4.4k and oil has recovered into the mid-$80s, while Bitcoin continues to trade near $60–65k following its sharp drawdown earlier in the year.This suggests BTC has not participated in the broader bid for scarce or inflation-sensitive assets, instead continuing to behave more like a liquidity-sensitive risk asset. For a stronger macro recovery signal, we would want to see Bitcoin begin closing this relative-performance gap against both gold and oil.Live ChartOn-chain InsightCapitulation Phase ConfirmedTurning from the macro backdrop to on-chain valuation, the structural picture has been consistent since early February 2026, when price broke below both the True Market Mean and the Short-Term Holder Cost Basis. That break confirmed a bear market regime, with Bitcoin valued beneath what both recent buyers and the broader active investor base paid for their coins. As the bear market has extended, the Short-Term Holder Cost Basis has now declined to $68.5k, falling below the True Market Mean at $75.8k, meaning coins are changing hands at prices beneath the cost basis of both cohorts. This configuration is a hallmark of the capitulation phase, where cycle bottom formation has historically taken place. For as long as price remains below the Short-Term Holder Cost Basis, on-chain valuation models will continue to treat the market as capitulating, a phase where new buyers accumulate with elevated conviction while the market remains structurally vulnerable to any adverse macro catalyst.Live ChartShallower Pain, Longer GrindWith the market trading in capitulation territory for close to three months since mid-May, the distinguishing feature of this episode has been the comparatively muted intensity of investor pain. The Relative Unrealized Loss measures the aggregate dollar value of unrealized losses held across the market as a fraction of total market capitalization, serving as a gauge of embedded financial stress. During the current episode this metric peaked near 25%, well short of the readings above 60% recorded during capitulation phases in prior cycles. Underwater investors have therefore not shouldered the same severity of loss as in previous bear markets. This partly reflects the shallower drawdown to date, but also the fact that a large portion of supply was accumulated around the election period at prices significantly below the all-time high, leaving overhead supply more evenly distributed rather than concentrated near the cycle peak. The resulting lower cost basis across in-loss supply reduces aggregate pain, though it also means this well-distributed overhang will likely require an extended period to resolve, contributing directly to the current sideways grind.Live ChartNo Bottom Without ExhaustionResiding in capitulation while enduring only moderate pain raises the central question of where the ultimate pain point sits and when the cycle low will form. Predicting an exact bottom is not possible, but the path toward seller exhaustion runs through either extended time in a bear market, further price discount, or a combination of both. The current cycle has delivered elements of each, with significant leg downs in the second half of January and again in May 2026, alongside more than seven months in a confirmed bear regime. What differentiates this episode from prior cycles is the shorter and shallower capitulation phase to date. The hallmarks of bottom formation are present, though whether a macro catalyst triggers a deeper leg down in the coming months remains unknowable. The Realized Profit/Loss Ratio, which compares the dollar value of realized profits against realized losses, has historically declined below 0.5 on a 90-day SMA basis before cyclical seller exhaustion is reached, and currently sits at 0.75. Until this metric reclaims the 2 threshold, any recovery should be treated as a local rally rather than a regime change.Live ChartOff-chain InsightPerpetual Demand Turns PositiveThe 30-day Perpetual Market Directional Premium has rebounded sharply back into positive territory after briefly falling deeply negative during the latest drawdown. This indicates that leveraged traders are once again paying a premium for long exposure, marking a meaningful improvement in speculative risk appetite.However, the current reading remains modest relative to the extreme positive premiums observed during previous impulsive advances. This suggests derivatives positioning has turned constructive without yet reaching euphoric levels, leaving room for further expansion should price begin to recover more decisively.Live ChartUS Spot Demand Yet to Re-EngageDespite the improvement in perpetual positioning, the Coinbase Premium Index remains persistently negative, signalling that US spot demand has yet to return in a meaningful way. The premium has remained below zero through much of the recent consolidation, even as Bitcoin stabilised around the $60–65k region.This creates a notable divergence between improving leveraged risk appetite and still-subdued spot participation. A sustained move back into positive Coinbase premium territory would provide stronger evidence that the recovery is being supported by genuine US spot accumulation rather than primarily derivatives-led positioning.Live ChartETF Flows Stabilise After Heavy OutflowsUS Spot ETF flows have improved materially from the severe distribution seen through June and early July, when the 7-day average fell toward -5k BTC per day. Since then, flows have repeatedly returned to positive territory, including a strong burst of accumulation in early August.The latest reading has again moved marginally positive after a brief return to outflows, suggesting institutional selling pressure has eased considerably, but sustained accumulation has yet to take hold. A more persistent run of positive ETF flows would strengthen the case that regulated spot demand is rebuilding beneath the current consolidation.Live ChartImplied Volatility Compresses Toward Cycle LowsBitcoin's DVOL has fallen back toward the mid-30s, placing implied volatility near the lower end of its range over the past two years. Options markets are therefore pricing a relatively subdued forward volatility environment, despite Bitcoin remaining close to recent lows.This degree of compression suggests expectations for large near-term price swings have been substantially reduced. While low implied volatility is not directional in itself, prolonged compression can leave the market increasingly sensitive to a volatility expansion should a meaningful catalyst emerge.Live ChartDownside Protection Eases at the Front End25-delta skew remains positive across the volatility curve, indicating that puts continue to trade at a premium to calls and investors are still paying for downside protection.However, short-dated skew has compressed notably, with the 1-week tenor falling toward the lower end of its recent range while longer-dated maturities remain closer to 10–13%. This suggests near-term fear has eased materially, even as investors retain a more cautious bias further out the curve.Live ChartOptions Flow Concentrates Around $65kOptions premium over the past 24 hours is heavily concentrated around the $65k strike, where large put buying is met by similarly substantial put selling. This points to active two-way positioning around the current price zone rather than a clean directional consensus.Further up the curve, call buying is most visible around $68k and $130k, signalling selective demand for upside exposure, while notable put buying at $45k shows that some investors continue to retain deep downside protection. Overall, positioning remains mixed, with the strongest conviction centred on managing risk around the prevailing spot range.Live ChartConclusionThe macro backdrop remains the binding constraint, with dollar weakness offset by 10-year yields climbing toward 4.7% and Bitcoin lagging the bid across both gold and oil. The On-chain models showed price trades below the True Market Mean and Short-Term Holder Cost Basis, confirming capitulation, though Relative Unrealized Loss peaking near 0.25 against readings above 0.6 in prior cycles points to a shallower and more distributed drawdown that will take time rather than price to resolve. Off-chain signals are similarly split, with perpetual demand turning positive and ETF outflows stabilizing, while the Coinbase Premium stays negative and implied volatility compresses toward cycle lows. The Realized Profit/Loss Ratio at 0.75 confirms seller exhaustion has not yet arrived. Until yields ease and this ratio reclaims the 2 threshold, any recovery is best treated as a local rally within an ongoing bottoming process.Disclaimer: This report does not provide any investment advice. All data is provided for informational 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.