On-chain analysis week 40/2025: Bitcoin maintains the flow

Summary of the situation

Bitcoin faces a dense resistance zone between $114,000 and $118,000 , which corresponds to the supply cluster formed from the peak chasing buys in July and August 2025. This is the area where a large volume of new investors – who tend to sell when the price returns to the breakeven level – creates a natural barrier to the short-term rally.

After a sharp slowdown in ETF capital flows in September, the first week of October recorded a slight recovery signal with the total net capital flow of the Bitcoin ETF group in the US reaching nearly +$430 million USD , an increase of more than 35% compared to the previous week .

Notably, the amount of BTC held by LTHs is still maintained around 14.9 million BTC , only down about 1.8% from the historical peak in April 2025 , showing that most long-term investors still maintain confidence and have not participated heavily in the distribution process .

Options skew has gradually moved toward neutral, reflecting easing downside risk aversion . Meanwhile, options flows show institutional investors have begun to bet on risk-reversal strategies , focusing on calls in the $120,000–$125,000 range for December 2025 — a sign of a cautious but optimistic view for the fourth quarter.

Analyzing on-chain metrics

VDD Multiple measures the “custody age destruction” in USD value of long-sleeping coins – in other words, when old UTXOs (many coin-days) are spent in large amounts, VDD will spike. History shows that spikes greater than ~2.9 to 3.0 coincide with the peak distribution phase of veteran holders, followed by weeks/months of correction.

Current status (early October 2025). VDD Multiple is maintaining around 0.9–1.0 (30-day average ≈ 0.95 ), close to the historical baseline . This confirms that selling pressure from “old” supply has cooled down significantly , consistent with the broader picture.

The past has shown that:

• Mar-2021 ~4.2 – marks a strong distribution phase of LTHs, followed by a deep market correction.

• Mar-2024 ~4.1 – appears simultaneously with “peak euphoria” in early 2024; then price retreats ~ 25% in Q2/2024.

• Currently ~0.95 should result in ~75%–80% lower than the above cycle peaks.

When VDD is below 1.5 and hovers around 1.0 , the old UTXO block hardly participates in large-scale distribution . Therefore, the recent corrections are mainly due to the rebalancing of leveraged positions and short-term options/ETF flows , not because of the “old money” exit wave.

Mar–Sep/2025 period recorded many successful STH-CB tests while VDD did not show a cyclical spike ; this confirms that the on-chain bottom is being protected by real spot demand (ETF + cash buyers), while LTHs supply switched from net selling to neutral/slightly bearish .

VDD Multiple ~0.95 confirms that there is no wave of "old money" selling , consistent with the picture of ETF net absorption again, volatility cooling down, and balanced derivative positions . In this frame, Short-Term Holder Cost Basis continues to be the strategic boundary above $106.5k–$108k, so it should maintain a controlled uptrend , with the target of re-conquering $118k. On the contrary, the VDD spike >1.5–2.0 is the quantitative signal for a deeper cooling phase .

Bitcoin’s MVRV (Market Value to Realized Value) measures the network’s “pricing to profits” relative to on-chain cost of capital. When MVRV exceeds historical positive deviations , the market typically enters euphoria and risk distribution accelerates; conversely, falling into negative territory reflects risk capitulation.

MVRV is currently above historical averages but has not yet reached the extreme bands (+1.0σ to >+1.5σ) . This structure favors a high accumulation phase above the holding cost of Short-Term Holders (STH), rather than an immediate cycle top distribution.

Rather than looking at MVRV as an absolute number, MVRV Extreme Deviations normalizes the indicator by the standard deviation around the cumulative mean . This approach eliminates temporal noise (as the MVRV median drifts as the network expands) and allows for cross-sectional comparisons across cycles of very different amplitudes. On the long-term chart, bold red clusters (MVRV > +1.0σ) are characteristic at the 2013, 2017, and 2021 peaks – coinciding with periods of intense profit realization and extended volatility for LTH.

In previous cycles, MVRV entered the +1.0σ → +1.5σ zone accompanied by a profit-spent volume explosion and pushed the price into a blow-off phase. This phenomenon has not appeared simultaneously on the recent on-chain indicators. Since setting a new ATH around $124k , MVRV has been oscillating above the equilibrium level of 1.0 with a narrowing amplitude . This pattern is compatible with re-accumulation at high levels with narrow price fluctuations, MVRV remains positive but does not spill into the euphoria band .

The STH-MVRV (90-day, normalized Z-score) measures the on-chain profit/loss of Short-Term Holders (UTXO age < 155 days) relative to their average cost of capital. When the Z-score exceeds +σ , history shows that the market enters a short-term euphoria and distribution risk increases. When it falls below −σ , selling pressure dries up, often creating a recovery.

Unlike the all-network MVRV, STH-MVRV is most sensitive to recent cash flow dynamics because it only tracks young supply. Z-score normalization ±σ eliminates platform drift over time and allows for cross-cycle comparisons:

• STH-MVRV is greater than +σ , most of the “young” coins have significant profits → high take-profit probability , increased risk of leverage sweep/adjustment.

• STH-MVRV is in the balance range , the market absorbs supply well, volatility decreases → consolidation/re-accumulation .

• STH-MVRV is lower than −σ , most STHs have significant losses → voluntary selling weakens, history is often a local bottoming area .

During the breakout phases (Q1/2024 and Q1/2025), STH-MVRV touched/closed to the +σ band many times ; immediately after that, the price experienced leverage-free periods but did not break the bullish structure . Currently, the STH-MVRV line has slid slightly around the mean , reflecting narrowing STH profit expectations and cooled profit-taking activities.

The major corrections (late 2022, mid-2023, April-May 2025) all brought STH-MVRV through −σ , signaling heavy losses for STH and absorption demand from long-term/ETF blocks. After these resets, the uptrend was re-established when the indicator returned above 0 .

In this cycle, every deep correction (late 2022; mid-2023; April-May 2025) brought STH-MVRV < 1 for a short time and then quickly recovered to >1 , confirming good absorption by basic demand .

The STH-MVRV band (gray) is currently fluctuating around 1.1–1.2 , significantly lower than previous euphoria peaks (usually ≥1.3–1.4 ). This implies that there is no extreme take-profit pressure , the market tends to accumulate sideways and then continue to increase instead of creating a distribution peak.

The nearest supply cluster is at $114k–$118k (the zone where late buyers want to “exit breakeven”/take profits). Clearing this zone requires maintaining a positive but not hot STH-MVRV , while spot/ETF volume continues to absorb.

During the strong 2020–2021 uptrend, STH-MVRV was consistently >1.3 before a 15–25% correction occurred. The 2024–2025 uptrend has so far failed to replicate the prolonged overheating – an important difference that favors a sustained uptrend scenario with a shallow correction range .

As long as price remains above STH Realized Price (~$95–100k) and STH-MVRV oscillates 1.05–1.25 , the market continues to be in re-accumulation mode above , favoring a breakout scenario past $118k as the supply cluster is gradually absorbed.

The STH Cost-Basis Bands (hourly) around the STH Realized Price continue to act as the pivot of the price structure. Since May 2025, the spot price has tested and held the STH cost-basis five times , then recovered back to the mid-upper band. The steady positive gap between price and cost-basis confirms that the bullish market regime is still dominant, with corrections being mainly mean-reverts to the mid-lower band to clear short-term overbought conditions.

In the current cycle, most of the time from Q2/2025 to now , the price has moved within an important price channel , reflecting that ETF spot demand is sufficient to absorb, while LTH supply has cooled down.

The five successful “holds” around the STH cost-basis since May 2025 demonstrate the sensitivity of short-term capital to this threshold. Each retest phase is usually accompanied by STH-MVRV contracting to ~1.00–1.05 , then rebounding, bringing the price back to the mid-high / high band within a few days, with a ~12–18% retracement – ​​a true pattern of re-accumulation above .

With STH Realized Price ~$95k–$100k and market price ~$113k–$118k , most of STH are still in profit , thereby thinning the forced selling pressure. On the other hand, because the profit is not too thick , the “extreme take-profit” motivation has not appeared en masse – consistent with the state of decreasing vol which could be an upward trend .

The RVT (Realized Value Ratio) of the Short-Term Holders (STHs) group is falling to the bottom of the cycle, showing that the profit/loss taking activities of the short-term holders have significantly decreased compared to the transfer flow on the network. At the same time, the supply structure of the Long-Term Holders (LTHs) group shows signs of shifting from a strong distribution (selling) state to a neutral/internal consumption (neutral) state, meaning that the supply pressure from this group is "cooling down".

In that context, the decisive factor is shifting to the direction of new capital flows (e.g. from ETFs, institutional capital flows, new money flows) to push prices up. Therefore, the near-term trend outlook (a few weeks to a few months) may lean towards the scenario of “building a foundation for accumulation + rebound” if external capital flows are strong enough to replace the momentum from LTHs.

Short-term holders are gradually withdrawing from active profit/loss taking — this helps reduce selling pressure from “weak hands”. This is a favorable condition for prices to maintain the base or bounce back if new demand appears. In the current phase, although there is still distribution, the distribution level is lower than the previous peak phase — meaning that the LTHs group is “enduring” rather than selling off.

LTHs, the major supply force in the market, are gradually reducing their distribution level and moving into a neutral or slightly accumulating state. This reduces selling pressure from long-term holdings, opening up conditions for new demand to have a greater influence.

Evaluation and Conclusion

Bitcoin’s on-chain structure is stabilizing towards accumulation : Short-Term Holders’ cost of capital (STH cost basis) continues to play the role of the main support cushion since May 2025; Long-Term Holders’ (LTH) distribution has cooled to near neutral; US ETF inflows have returned to net positive , while market sentiment has cooled to a “cooling but not panicking” state.

Each correction was quickly absorbed around this cost basis, reflecting a thorough purging of the “weak” supply . Conversely, the LTH Net Position Change index – which measures the net amount of BTC withdrawn or deposited into the wallets of long-term investors – has returned to neutral territory after months of deep negative territory , suggesting that the distribution process has temporarily ended .

After a mild pullback in late Q3, US spot Bitcoin ETFs returned to positive net inflows in the first week of October 2025 , with total inflows exceeding $400 million in just three trading sessions. The recovery in ETF inflows coincided with the suspension of distribution by Long-Term Holders , reducing circulating supply while increasing speculative and long-term investment demand .

The market is no longer showing signs of extreme euphoria, but there are no signs of a recession either. This is similar to past “healthy consolidation” periods, which are often the premise for the next extended growth cycle .

Disclaimer: The information presented in this article is the author's personal opinion in the cryptocurrency field. It is not intended to be financial or investment advice. Any investment decision should be based on careful consideration of your personal portfolio and risk tolerance. The views expressed in this article do not represent the official position of the platform. We recommend that readers conduct their own research and consult with a professional before making any investment decisions.

API & Data: Glassnode

Compiled and analyzed by HCCVenture

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