The cryptocurrency market is displaying a weak outlook due to low liquidity inflows and fragile investor confidence. According to the latest report by Glassnode, Bitcoin (BTC) is facing downward risks amid declining participation across the market and ongoing selling pressure. The market is adopting a defensive stance due to low liquidity inflows and weakening investor confidence. Glassnode’s report highlights that Bitcoin (BTC) is encountering downward risks due to reduced participation across the market and ongoing selling pressure. While some speculative transactions persist, the report emphasizes the market’s overall uncertainty in direction. Glassnode’s analysis indicates a weak appetite for buying Bitcoin in the market’s fundamental indicators. Despite a positive turn in the continuous contract volume delta (CVD), indicating low spot market volumes, this recovery is not strong enough to form a solid trend. The market has seen a decrease in participation in recent weeks, with investors demonstrating caution on the buying side. Movement in Exchange-Traded Funds (ETF) markets further supports the market’s current trend. Ongoing outflows in Bitcoin ETFs indicate a tendency among institutional investors to reduce risks. Though outflows have slowed, decreasing trading volumes reveal that major investors are acting more prudently in the market. Uncertainty prevails in the derivatives market. While the number of open positions has stabilized post recent declines, funding rates remain significantly below long-term averages. This suggests a weakening demand for leveraged long positions. On the other hand, there is a noticeable inclination towards increased protection against downward risks in the options market. The 25 Delta Skew indicator reveals that investors are intensifying their hedge positions against price decreases. On-chain data present a cautious picture of the market’s current state. Active addresses, transfer volumes, and transaction fees on the Bitcoin network continue to decline, indicating reduced investor interest and capital inflows. Additionally, the decrease in hot capital share and the slowdown in realized capital growth suggest a more defensive market stance. Negative signals are also visible in profitability measures. While the profitable fraction of Bitcoin supply decreases, the Net Unrealized Profit/Loss (NUPL) indicator shows that investors are under increasing stress, with the possibility of forced selling rising. Risks persist for Bitcoin. The overall market outlook shows that Bitcoin continues to struggle with upward movements. Ongoing outflows from ETF markets, weakening on-chain fundamentals, and increasing demand for protection against downward risks in the options market indicate that Bitcoin may not find sufficient support for a strong recovery. If there is no significant increase in liquidity inflows, market conditions could maintain the current downward trend.