The cryptocurrency market displays a weak outlook due to low liquidity inflows and vulnerability in investor confidence. According to the latest report published by Glassnode, Bitcoin (BTC) is facing downward risks due to decreasing participation across the market and ongoing selling pressure. The market is adopting a defensive stance because of low liquidity inflows and a weakening in investor confidence. Glassnode’s report emphasizes that Bitcoin (BTC) faces downward risks due to low participation across the market and ongoing selling pressure. While some speculative trades persist, the market’s overall direction remains uncertain. Glassnode’s analysis indicates a weak buying appetite for Bitcoin based on fundamental market indicators. Although spot market volumes are low, the continuous contract volume delta (CVD) may have turned positive, it may not be sufficient to form a strong trend. The decrease in market participation over the past few weeks highlights investor caution on the buying side. Movements in the Exchange-Traded Fund (ETF) markets also support the current market trend. Continued outflows in Bitcoin ETFs underscore the inclination of institutional investors towards risk reduction. Although outflows have slowed down, the decline in trading volumes indicates that large investors are acting more cautiously in the market. Uncertainty prevails in the derivatives market. While the number of open positions has stabilized after recent declines, funding rates remain well below long-term averages, indicating weakened demand for leveraged long positions. Moreover, a notable increase in hedging positions against downward risks is observed in the options market. The 25 Delta Skew indicator shows that investors are increasing their hedge positions against price declines. On-chain data paints a cautious picture of the current market situation. Active address count, transfer volumes, and transaction fees on the Bitcoin network continue to decline, signaling diminished investor interest and capital inflows. Furthermore, the decrease in the percentage of hot money and the slowdown in realized capital growth indicate a more defensive market stance. Negative signals are also seen in profitability metrics. While the profitable portion of Bitcoin supply decreases, the Net Unrealized Profit/Loss (NUPL) indicator suggests that investors are increasingly under stress, with a rising possibility of forced selling. The overall market outlook reveals that Bitcoin continues to struggle in moving upwards. Ongoing outflows from ETF markets, weakening on-chain fundamentals, and an increasing demand for protection against downward risks in the options market indicate that Bitcoin may not find enough support for a strong recovery. Current market conditions may sustain the existing downward trend if there is no significant increase in liquidity inflows.