The percentage of Bitcoin (BTC) supply that is in profit has reached 92% – a level that is typically associated with bull cycles, but also brings with it potential profit-taking pressure. This suggests that the majority of investors are currently holding profits, reflecting the strength of the market.
Historically, whenever the profitable supply ratio exceeded 90%, the uptrend has often been extended. However, the market has also witnessed strong corrections when the excitement reached its peak. Currently, investors are facing a picture that is both full of expectations and hidden with caution. The future of this trend will depend on whether the buying pressure continues to maintain, or the profit-taking pressure will prevail.
NVM decline shows problem
The Network Value to Metcalfe Ratio (NVM) just dropped 4.54%, revealing signs of instability in how the market values Bitcoin compared to the actual level of activity on the network.
This index measures the correlation between market Capital and connectivity strength, which is XEM a key metric for assessing fair valuation. The decline suggests that market valuations may be “Front Running” of underlying performance, raising concerns about the balance of the current rally. Historically, NVM’s decline has been associated with slowing growth or signs of weakness in price expansion.
However, the Bitcoin network still maintains significant size and influence. The question now is whether the growth momentum has enough endurance to continue, while signals from the network are showing signs of running out of steam.
Stock-to-Flow Model Weakens, More Skepticism
Bitcoin's Stock-to-Flow (S/F) ratio has just plunged 42.86%, calling into question one of the market's most popular scarcity models.
The index , which is designed to measure scarcity by comparing circulating supply to the rate of new issuance, is often seen as a guide to bull cycles. But the current plunge shows that the scarcity dynamic has clearly weakened, casting doubt on supply-based valuation arguments.
In fact, analysts have long debated the reliability of the Stock-to-Flow model, and this drop reflects a wavering belief that Bitcoin’s long-term value can be sustained by scarcity alone.
Cash flow on the floor exposes liquidation pressure
Spot deposit/withdrawal flow data shows notable liquidation fluctuations, with a positive net Capital of $39.13 million at the time of writing – reflecting cautious market sentiment.
Typically, a steady net inflow will increase the supply on the exchange, thereby creating stronger selling pressure. Conversely, a steady outflow is often a signal of accumulation and reduces the risk of a sell-off.
Recent Netflow figures suggest a near-term indecision: liquidation has not been completely drained, but there are no clear signs of accumulation. Traders are now watching to see whether Capital continue to increase, opening up the risk of a correction, or whether withdrawals will return to dominate, reinforcing confidence in an uptrend.
Will the bullish signal slip through the cracks?
While 92% of supply is profitable, reflecting the prevailing bullish sentiment in the market, the 4.54% drop in NVM coupled with the 42.86% plunge in the Stock-to-Flow index exposes cracks in the pricing model and scarcity assumption.
At the same time, net Capital inflows to the exchange continue to sound the alarm about liquidity liquidation.
The combination of these conflicting signals suggests that Bitcoin is still struggling to establish a trend. The short-term outlook is therefore uncertain, forcing investors to remain cautious in the current sensitive context.
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