Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) are entering Q1 on cautious sentiment after months of range-bound trading.
Bitcoin Sentiment Shifts
In its Charting Crypto Q1 report, Glassnode in collaboration with Coinbase (NASDAQ:COIN) Institutional, stated that Bitcoin continues to trade in a low-conviction sentiment regime.
Net Unrealized Profit/Loss (NUPL) shifted from Belief to Anxiety during October's liquidation event, a transition that historically aligns with consolidation phases where investors stay engaged but hesitant.
Structurally, this backdrop leaves room for upside if volatility continues to compress or macro conditions remain supportive.
The October liquidation also flushed out excess leverage.
Futures leverage has fallen to roughly 3% of total crypto market capitalization (excluding stablecoins), reducing systemic risk.
Rather than exiting exposure, traders have rotated into options.
Bitcoin options open interest now exceeds perpetual futures, with positioning skewed defensively supporting a more resilient, though less aggressive, market structure.
Ethereum Cycle Signals Are Fading
ETH appears to be late in its current cycle, but traditional cycle-based frameworks are losing explanatory power.
Structural shifts, including Layer-2 fee compression and evolving network economics, have weakened the reliability of historical cycle analysis.
Looking ahead, ETH's performance is likely to be driven more by liquidity conditions and market positioning than by cycle timing alone.
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