Glassnode Flags BTC Demand Exhaustion – What’s Next?

Glassnode reports BTC demand exhaustion near $70K as Willy Woo says Bitcoin bear market remains in Phase 1.

Bitcoin market data shows rising stress as analysts track volatility, liquidity, and demand trends.

New reports indicate that the Bitcoin bear market may still be developing, while on-chain metrics point to weakening demand near key price levels.

Bitcoin Bear Market Seen in Early Phase

On-chain analyst Willy Woo said Bitcoin remains in “Phase 1” of a broader bear market. He stated that rising volatility marked the shift into a downturn.

According to Woo, volatility acts as a core trend signal for quantitative analysts. He noted that volatility has continued to rise, which confirms ongoing weakness.

I find it useful to frame BTC bear markets in 3 phases:

Phase 1 – The start, where BTC liquidity has already broken down (this happened Q3 2025) and price begins to follow downwards. BTC is a small asset so it’s hyper sensitive to liquidity. Because of this, it tends to lead…

— Willy Woo (@willywoo) February 18, 2026

Woo explained that volatility often peaks during the middle or later stages of a cycle. He added that smaller secondary peaks can appear near a macro bottom.

These peaks, he said, tend to align with market capitulation. However, he stressed that volatility alone does not define the full Bitcoin bear market structure.

He also referred to internal liquidity and investor flow models. Woo said these models currently align with volatility readings. He divided the bear market into three phases.

Phase 1 began in the third quarter of 2025 when liquidity conditions deteriorated and prices declined.

Phase 2 and Broader Market Risk

Woo said Phase 2 may begin when global equities turn bearish. He described equities as slower markets that confirm risk-off conditions over time.

Bitcoin, he said, reacts faster because it is smaller and more sensitive to capital flows.

Phase 3 would start once liquidity stabilizes and capital outflows peak. Woo stated that final capitulation usually occurs during this stage.

He explained that investors often exit positions at that point. Liquidity conditions then begin to recover gradually.

When asked about his previous $200,000 to $300,000 Bitcoin price forecast from 2021, Woo acknowledged the error.

He said derivatives markets altered cycle behavior. He added that broader market structures required expanded analytical models beyond on-chain data.

**Related Reading: **Veteran Trader Peter Brandt Predicts BTC Bounce, Gold at $4K

Glassnode Flags BTC Demand Exhaustion Near $70K

Blockchain analytics firm Glassnode reported signs of demand exhaustion near the $70,000 level.

The firm said each attempt to reclaim that price since early February faced resistance. Realized profits exceeding $5 million per hour still led to rejection.

Since early February, every attempt to reclaim $70k has met demand exhaustion, with even >$5M/hour in net realized profit triggering rejection.
Contrast that with Q3 2025’s euphoric phase, when profit realization surged to $200–350M/hour.
Ongoing regime of thin liquidity makes a… pic.twitter.com/7XxWBWl7t2

— glassnode (@glassnode) February 19, 2026

Glassnode compared current activity to the third quarter of 2025. During that period, realized profits ranged between $200 million and $350 million per hour.

The firm stated that liquidity conditions are now thin. As a result, sustained movement into the $70,000 to $80,000 range appears difficult.

Glassnode’s data suggests weaker buyer strength at higher levels. Combined with rising volatility and reduced liquidity, the data points to ongoing stress.

Market participants continue monitoring demand metrics and liquidity flows for signs of stabilization.