On-chain analysis week 49/2025: Bitcoin is entering a sensitive zone.

Market Summary

Bitcoin is still trading above the real market average ( $82,000 ), allowing the market to maintain a support price range. However, when compared to previous cycles, the current structure shows clear similarities to Q1 2022.

Over 25% of supply is in a faulty state , reflecting increasing energy allocation. The CVD point has reversed, confirming a significant drop in spot market demand – a key indicator when considering the health of real money flows.

The momentum remains positive, helping the market maintain a stable accumulation structure instead of falling into a sell-off. However, the support level of this indicator is still significantly lower than the peak of the first half of 2025, indicating that the current support level is only minimal.

Compared to quantitative models such as Actual Price, Average Active Investor Value, and Quantile Range, the 0.75–0.85 percentile range ($96,100–$106,000) can be identified as a critical boundary for structural market recovery. Holding above this range will quickly rebalance the market and then recover. Conversely, losing this range will drastically reduce the potential for expansion, dragging the market into a "mid-cycle recession."

Analyzing on-chain metrics

The Coin Years Destroyed (CYD) index measures the total number of " aged " BTC coins destroyed during volatility. It's one of the strongest indicators for assessing long-term supply triggers. When the CYD value rises sharply, the market is witnessing the depletion of long-aged coins – something that often happens during distribution phases or periods of high volatility in the cycle.

CYD is recovering strongly, reaching the ~6–6.5 billion coin-years destruction range, the highest level since the 2021–2022 distribution and now only slightly below its 2017–2018 all-time high. Long-term supply ( LTH supply ) is being consumed at a high intensity, indicating the activation of older coins entering a large-scale distribution phase.

When CYD surges to the peak of its cycle, the market always experiences a prolonged period of revaluation. The price surge to the levels corresponding to early 2018 and late 2021 closely resembles cyclical distribution phases , rather than bottoming out . Spending behavior on long-lived cryptocurrencies is increasing in a way that only occurs during major market volatility.

The Bitcoin market is experiencing a period of structural stress , with unrealized losses spreading and dominating investor behavior. Total supply in losses has surged, reflecting the pressure from high buying levels over the past two years weighing heavily on market sentiment.

The latest data shows the 7-day average of Total Supply is at a loss:

• Increased to 7.1 million BTC .

• This is the highest level since September 2023.

• This is equivalent to about one-third of the total Bitcoin supply currently in circulation.

Much of the buying pressure from the rally over the past two years is now in a losing position. This is a notable reversal from the early to mid-2024 period , when much of the supply remained in profitable territory.

The supply loss zone fluctuated between 5-7 million BTC , coinciding with the sideways trading period in early 2022 and the market's preparation for a prolonged downturn in 2022-2023.

When the supply shortage remains high for an extended period, the market tends to absorb the weakening distribution pressure but lacks the momentum to recover. If the supply shortage continues to expand beyond the 7.5-8 million BTC threshold , the market will inevitably enter a strong distribution phase, often coinciding with deeper corrections.

According to the Supply Quantiles Cost Basis model , the supply of BTC is grouped according to the cost of capital for each group of investors. Current data shows that:

• The price of BTC has completely broken through the 0.75 quantitative junction , currently trading around $96,100 .

• This means that more than 25% of the total market supply is in a state of unrealized losses.

• Historically, when the proportion of supply trading below market value exceeds 25%, investor defensive behavior typically shifts significantly —from long-term holding to prioritizing reducing positions to preserve capital.

The first quarter of 2022 was marked by a weakening of new demand in the market, while supply from high-priced buyers began to be distributed. The current structure shows strong similarities.

The market is caught in a tug-of-war between two forces:

(1) The risk of overtaking by the leading buyer – occurs when prices remain below their cost basis for an extended period.

(2) Seller exhaustion – can form a bottom when top buyer's distribution pressure weakens.

This equilibrium places the market in an extremely sensitive state, where even a macroeconomic shock or liquidity shortage is enough to push prices below the market's true average. The market will only truly escape the risk zone when BTC reclaims the $106,200 mark and turns it into support.

Bitcoin is currently undergoing a deep structural correction, not a panic crash. However, if the price doesn't soon regain the 0.85th percentile, the market could enter a revaluation cycle similar to early 2022, with a prolonged weakening of upward momentum.

Although the current market structure bears many similarities to early 2022 – before the market entered a prolonged bear market – the net position change in Real Market Capitalization remains positive, providing significant support at the Real Market Average.

The net change in Bitcoin's Real Market Capitalization is approximately +$8.69 billion per month . This is significantly lower than the peak of +$64.3 billion per month in July 2025. However, it's important to note that this value remains above 0, reflecting that new capital is still being injected into the network.

Why has Bitcoin maintained support around the Real Market Average ( $88,600 ) and recovered above $90,000 after the price drop? Despite the market exhibiting many similar characteristics to early 2022 (increasing selling pressure, weak spot demand, widespread risk aversion), the Real Market Capitalization has not declined but continued to expand.

The inflow of capital into Bitcoin remains positive, as evidenced by the net change in Real Market Capitalization of +$8.69 billion/month . This positive capital flow is the direct reason why True Market Mean continues to act as strong support. Although the market structure has many similarities to Q1 2022, it does not replicate the outflow signals – a factor that led to the collapse in 2022.

The SOPR (30-day SMA) for long-term holders plays a crucial role in measuring the actual profit margin of long-term investors spending their cryptocurrency.

When the SOPR is above 1, it indicates that the LTH group is still selling at a profit , meaning current demand remains strong enough to absorb profit-taking pressure. Conversely, a sharp drop or falling below 1 in the SOPR historically marks a shift to a bearish phase of the market.

The SOPR (30-day SMA) for long-term holders is currently at ~1.43, a significant drop from its recent peak (~2.8–3.0). However, it remains above 1, meaning that the long-term holding group is still taking profits, not cutting losses.

• A unit of Bitcoin sold by LTH is currently priced 43% higher than the average purchase price.

This reflects that market demand remains strong enough to absorb the selling pressure, but profit margins are shrinking rapidly, indicating that supply pressure is becoming more significant. Long-term investors are taking advantage of the recent price surge to take profits, but narrowing interest rate margins suggest that current demand is not strong enough to trigger a sustained growth phase.

The Bitcoin supply has remained unchanged for over a year (Last active supply in 1 year), reflecting the confidence and accumulation behavior of long-term investors. As this indicator rises, the dormant supply continues to expand, suggesting that accumulation is prevailing.

The supply of BTC over one year is decreasing from a peak of around 14 million BTC to lower levels, reflecting that a significant portion of long-term investors are starting to spend.

This trend is particularly evident during the current correction, where the Net Position Change (30 days) has turned sharply negative, with a depth comparable to the initial distribution phases in the 2017, 2021, and especially late 2020 - early 2021 cycles.

Investors who have held Bitcoin for more than a year are selling off with increasing intensity, reflecting a localized loss of confidence in the market's upward momentum.

The current sell-off is as deep as or deeper than typical distribution phases in 2023-2024, but has not reached the extreme levels of the 2018 or 2022 lows, when panic occurred. Long-term supply is exiting a deep accumulation phase that lasted throughout 2023-2025 and is strongly shifting into a distribution phase, but has not yet caused a complete capitulation in the cycle.

Assessment and Conclusion

The Supply-Based Cost model suggests that the price of Bitcoin has fallen below the 0.75th percentile, currently trading in the range of $96,100–$106,000, corresponding to the 0.75–0.85th percentile range – where the cost of capital for investors who bought at high prices in the late stages of a bull cycle is concentrated.

The lower, actual market average price still serves as the ultimate “anchor point” for the cycle’s valuation. Temporary price stability above this threshold suggests that defensive demand remains, but the safety margin is not large; a single liquidity shock or negative news event would be enough to push the current structure deeper into true bear market territory.

The fact that >25% of the supply is incurring losses indicates that the "pain" has spread to a significant portion of investors, especially those who bought at high prices in the range of $106,000–$118,000. At the same time, actual losses are trending upwards.

With over a quarter of the supply currently in a discount state, this weak momentum is only enough to slow the collapse, not enough to create a clear bullish reversal. In other words, the current influx of new money is merely helping the market "buy time" around the true market average price.

The fact that the price held steady within the $96,100–$106,000 range helped the market avoid an immediate collapse like in 2022, but at the same time, it confirmed that the market has not yet accumulated enough momentum for a strong reversal. Until the $0.85 (~$106,200) price level is recaptured as support, Bitcoin will continue to be “stuck” in a sensitive area where the defensive side still holds the advantage, and any negative macroeconomic shock could push the current structure deeper into a full-blown bear market.

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

API & Data : Glassnode

Compiled and analyzed by WHAT Exchange and HCCVenture

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