This week’s on-chain picture: Bitcoin saw a short rebound after a recent pullback, with spot ETF inflows remaining a material demand source; Ethereum’s unstaking/withdrawal queue expanded meaningfully, spotlighting staking liquidity risk; while on-chain activity (active addresses, custodial flows) paints a mixed picture of waning spot volumes but persistent institutional demand. Key numbers: ETF net inflows into flagship products were sizeable mid-week, and ETH unstaking volumes have climbed into the high-hundreds of thousands of ETH — both items are market-moving.
1) This week’s top five on-chain takeaways
- Spot Bitcoin price bounced from a recent pullback into the low-$100k range and showed improved on-chain activity patterns (inflows to custodians and derivative open interest shifts).
- Spot-ETF flows remain a significant demand engine. Major ETFs (notably IBIT) recorded large mid-week net inflows, reinforcing buy pressure tied to product creation.
- Ethereum’s unstaking/withdrawal queue expanded sharply, creating potential short-term liquidation/withdrawal pressure and raising questions about LST liquidity.
- Exchange spot volumes softened but custodial balances rose in pockets, suggesting a rotation from retail exchange activity toward institutional custody and ETF channels.
- On-chain active addresses and DeFi activity show mixed signals — some chains (Ethereum, Solana) saw increased wallet activity while aggregate on-chain transaction volumes remain below the highs of the rally.
2) Bitcoin on-chain: details & interpretation
What’s happening
- Glassnode noted a rebound in BTC price and flagged improved on-chain metrics after a dip below roughly $114k earlier in the month, with derivatives sentiment and ETF activity key drivers of short-term direction. That rebound coincides with renewed ETF creation activity tied to institutional allocations.
Metrics to watch (and why they matter)
- ETF net flows / creations — direct peg to spot via AP buying (watch IBIT & other flagship flows). Net positive creation weeks historically correlate with spot accumulation.
- Exchange reserves (BTC on exchanges) — falling reserves support scarcity narratives; sudden inflows to exchanges can signal impending selling pressure.
- Realized & unrealized profit bands (MVRV) — high aggregate profitability historically precedes consolidation; monitor when many coins are in profit.
- On-chain transfer volumes to custodian addresses — when custodians take custody for ETFs, it shows institutional demand moving on-chain.
Market implication: ETF demand + falling exchange supply = structurally supportive flow. But smaller spot volumes and high investor profitability argue for caution — flows can amplify moves both up and down.
3) Ethereum on-chain: staking & the unstaking queue
What moved this week
- A material amount of ETH entered the unstaking queue (reports show the queue has climbed into the high-hundreds of thousands of ETH), adding a new liquidity dynamic as withdrawals backlog and LST (liquid staking token) mechanics interact with spot liquidity and derivatives.
Why it matters
- Staking withdrawal backlog can create temporary selling pressure once withdrawals process, strain liquid staking liquidity, and widen the spread between ETH and LST prices (relevant for market makers and margin desks).
- DeFi & LST exposure: if large stakers redeem into LST or sell post-withdrawal, AMM pools and LST liquidity providers may face increased slippage.
Metrics to watch
- Unstaking queue size & estimated wait time — immediate signal for potential selling pressure. (Blockchain News)
- LST supply & peg spreads (e.g., stETH/ETH) — divergence warns of liquidity stress.
- Active addresses interacting with DeFi and staking contracts — growth signals increased protocol usage; drops might indicate cooling demand.
4) ETFs, OTC & custody — flow plumbing
Observed flow mechanics this week
- ETF inflows are visible, on some days reaching hundreds of millions across major funds; APs and OTC desks continue to source spot to satisfy creations. This week’s IBIT inflow data shows how a single product can be a substantial buy source on certain days.
Implications
- AP/OTC desks are central — they act as the bridge from institutional fiat to spot crypto and their ability to source liquidity determines how quickly ETF demand translates to on-chain buys.
- Custody concentration — as ETFs scale, a smaller set of custodians hold more institutional supply; concentration risk is operationally important for allocators.
What to monitor
- Daily ETF net flow dashboards (Farside, Dune dashboards) for early signals.
5) Exchange flows & liquidity — current signals
This week’s pattern
- Several market reports and weekly wrap notes pointed to lower spot volume even as some custodians’ holdings rose — a tell that retail trading has cooled while institutional pool accumulation continues behind the scenes.
Why it matters
- Volume drop + concentrated inflows can increase volatility if a few large participants (or APs) need to source liquidity quickly; watch order book depth on major exchanges and spreads in OTC quotes.
Key indicators
- Exchange net flow (inflows − outflows)
- Order book depth for top venues
- Basis between ETF market price and spot
6) Other chains & on-chain health (brief)
- Solana & layer-1s: Nansen and chain-tracking blogs show rising active address counts and on-chain interactions for some L1s this week, suggesting pockets of user re-engagement even with muted aggregate volume.
- DeFi TVL & LP rebalancing: watch stablecoin pools and LP rebalancing events following ETF/market moves — these are where liquidity stress first appears.
7) How to use this wrap: what traders & PMs should do next week
For traders (short-term)
- Monitor ETF daily flows and custodian inflows intraday — sudden large creations can push spot quickly.
- Keep an eye on LST spreads and the ETH unstaking queue — widening spreads can create trade opportunities or liquidity traps.
- Use on-chain liquidity metrics (exchange reserves, order book depth) to size entries to avoid slippage.
For allocators / PMs (medium-term)
- Stress-test execution plans with APs/OTC desks — model sourcing cost under large inflow scenarios.
- Evaluate custodian concentration and insurance/segregation before scaling allocations.
- Integrate ETF-flow dashboards and on-chain custodian metrics into portfolio monitoring.
8) Charts & dashboards to include in your weekly note (suggestions)
- BTC: exchange reserves (7d/30d), ETF daily net flows (USD), MVRV bands.
- ETH: unstaking queue size (ETH), stETH/ETH spread, DeFi active addresses.
- Liquidity: order book depth & OTC desk spreads.
- Cross-chain: active addresses by chain (7d change).
9) Sources & how we compiled this wrap
Primary data & research feeds used this week:
- Glassnode Market Pulse (on-chain market signals).
- ETF flow trackers & reporting (Dune dashboards, Farside/industry trackers).
- The Block / industry news on ETH staking/unstaking dynamics.
- Weekly institutional wraps (Zerocap) and chain analytics (Nansen).
10) Quick weekly checklist (for your desk)
- Add ETF daily flow feed to your intraday watchlist.
- Monitor ETH unstaking queue & LST spreads each morning.
- Check exchange reserves and top-venue order book depth before large executions.
- Run sourcing scenario for >$50M buys: OTC vs exchange vs AP creation.
- Archive weekly on-chain charts (MVRV, custody flows, active addresses) for trend analysis.
Short FAQ
Q: Are ETF inflows the only thing moving price?
A: No — ETF flows are a big visible driver, but macro news, derivatives positioning, and retail behavior still move price. Use on-chain signals in combination with market indicators.
Q: Should I be worried about the ETH unstaking queue?
A: It’s a risk to monitor — large unstaking backlogs can pressure LSTs and increase short-term selling, but timing and execution paths matter (many withdrawals are processed over time).
