A healthier market? On-chain analysis of BTC with Prof. Chain – Cryptoast

BTC will jump again

After several weeks of decline, the price of Bitcoin managed to hold above the $110,000 mark. While the short-term price action provides relief for late entries, the long-term momentum is starting to show signs of slowing.

While it is too early to say that this bull cycle is coming to an end, it is essential to study this dynamic to know what to expect in the coming weeks or months.

Figure 1: BTC spot price

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Beautiful weather after the rain!

In our previous analysis, we assumed that the market was in the context leading to the formation of a local bottom.

It’s done now, BTC has bounced back from $107,000 to $115,000 and re-entered the range we’ve been watching for weeks between $108,000 and $117,000.

During this rally, the price of Bitcoin managed to rise above the average buying price of short-term investors (STH), estimated at almost $113,000.

The recovery of this key level is particularly constructive and indicates that the financial and psychological situation of new entrants is improving.

Figure 2: Average purchase price of short-term investors

In the derivatives markets, the speculative clean-up we documented in this analysis appears to be receding, with open interest in Bitcoin futures stabilizing around 320,000 BTC.

Current values ​​are the lowest seen in the last 12 months, making the current market environment the healthiest we have seen in a long time in terms of speculative risk.

Note that the recent increase in BTC has not been accompanied by a significant increase in open interest, suggesting that a little leverage has been added to the markets in recent days.

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Figure 3: BTC Futures Open Interest

However, we must not lose sight of short-term price action, which remains partly driven by the liquidity present in the derivatives markets.

The liquidity heat map shows that the price is now moving between two significant pockets of liquidity:

• short cash open at new ATH, between $124,000 and $126,000;
• long cash opened at a recent local low, between $103,000 and $106,000.

Although it is currently impossible to predict with certainty which of these pockets will be breached first, current dynamics appear to favor short press. Continuation!

Figure 4: Heat map of liquidity in derivatives markets

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Cyclical Dynamics of Bitcoin

In addition to the short-term context, it is essential to monitor the long-term dynamics of BTC. From 2023, the gradual expansion of the market caused the share of supply to profit to exceed the 95% mark several times.

It is during these periods that the market records new records, but also the most likely correction.

Despite all that, each of the corrections seen in recent years has produced less and less severe declines in the bid-to-profit percentage.

This shows that a growing portion of the circulating supply remains in profit, bringing the market closer to a saturation point where almost all BTC would be held in profit.

This context manifests itself during the advanced or even final stages of bull cycles, when the circulating supply reaches a point where its profitability is so high that a small correction can then significantly undermine this indicator.

If nothing like that is seen at the moment, we will have to be careful in the coming weeks and months to identify a potential change in the structure of the market.

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Figure 5: Bid-to-Profit Percentage

The MVRV ratio, which measures investors’ average unrealized profit/loss rate, is another fundamental metric to watch to gauge the progress of a bull cycle.

If the price of BTC has seen several consecutive price records between 2023 and 2025, this indicator has seen falling peaks. This signals a slowdown in the market’s latent profitability: although the price is rising, the average investor’s profit is falling.

This divergence is typical of the final stages of bull cycles, where rising prices can no longer generate sufficient profits to stimulate demand. Likewise, each correction throws more and more investors under the water as they try to improve their profitability.

Ultimately, the perceived value of the market (spot price) tends to approach its fundamental value (MVRV ratio), which mechanically leads to a structural change towards downward dynamics in the medium term.

Although the market has managed to hold relatively high so far, it is important to note that the first signs of a slowdown are emerging.

Figure 6: MVRV ratio

Finally, the SOPR ratio, which measures the average profit/loss taking behavior of investors, helps determine whether the market is about to change structure or not.

Each bullish SOPR point represents a wave of massive profit-taking, creating significant selling pressure on the market, slowing the rally and often marking local highs.

This is followed by corrections that bring SOPR closer to the neutral zone (SOPR = 1), which represents the boundary between medium/long-term bullish and bearish trends in BTC.

To date, SOPR has managed to hold above this line quite robustly, underscoring the resilience of the upcycle. If the weather is good at the moment, we will have to be careful when the SOPR drops below 1 for an extended period.

Figure 7: SOPR ratio

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Summary of this Bitcoin on-chain analysis

Finally, this week’s data suggests that the financial and psychological situation of new entrants is improving.

BTC’s recent rally has not been accompanied by a significant increase in open interest, suggesting that little leverage has been added to the markets in recent days.

The MVRV ratio saw declining peaks between 2023 and 2025, signaling a weakening of the market’s latent profitability: although the price is rising, the average profit for investors is falling.

Although the market has managed to hold relatively high so far, it is important to note that the first signs of a slowdown are emerging.

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Sources – Figures 1 to 7: Glassnode