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On-chain data weekly review: Bitcoin hits a new high for the third time in this cycle, and there may still be room for a rise.
Author: Glassnode
Compiled by: Felix, PANews
Key Points:
Bitcoin hits a new high
The Bitcoin market remains strong, reaching a new high of $111,000, marking the third time in this cycle that it has broken its historical high. Historically, a brief sell-off often follows the price discovery phase, as early profit-takers seize the opportunity to exit at new highs and reduce their risk.
Bitcoin has followed this pattern so far, with the price dropping to $107,000 shortly after the initial breakout, then rebounding and consolidating around $108,000 for the remainder of the week.
Against the backdrop of a severe macroeconomic situation and escalating geopolitical tensions, Bitcoin's performance surpasses that of most asset classes, making the overall outlook highly uncertain. In a relatively challenging market environment, this strong performance is indeed an encouraging sign.
Comparing the price performance of the current cycle with previous cycles, it is found that although the total market capitalization of Bitcoin differs by several orders of magnitude, there is a striking similarity in structure. The chart below shows the performance since the relative cycle low point:
Considering the significant increase in Bitcoin's market value today, being so close to the previous cycle's trend is an incredible achievement. This indicates that the scale of demand for Bitcoin is in sync with the growth rate of the asset.
Evaluating the accumulation patterns of different wallet sizes, it can be seen that new highs often stimulate significant accumulation. This will drive the accumulation trend score towards the maximum value of 1.0.
It is worth noting that when historical highs of $70,000 and $107,000 were reached in March and November 2024, respectively, the accumulation pressure significantly increased. This indicates that investors tend to buy heavily when the market enters the price discovery phase, but it also shows that existing holders tend to take profits when prices are higher. This "herd effect" highlights the converging behavior of market participants at key psychological price levels and events (such as breaking new highs).
In contrast, the last cycle peaked at $69,000 in November 2021, facing immense buying pressure during and after the price peak. This ultimately marked the arrival of a cyclical top and initiated a prolonged bear market in 2022. While strong buying is usually a positive signal, it is important to recognize that overwhelming consensus behavior is not always a reliable indicator of future direction (and can actually be a contrary indicator).
Profit levels rise
As the market re-enters the price discovery phase, the unrealized profits held by market participants have significantly increased. With the improvement in investor profitability, it is generally expected that selling pressure will correspondingly increase. As prices rise, a larger scale of buyers is needed to absorb the circulating tokens to maintain the upward momentum in the market.
The relative unrealized profit indicator is an important tool for measuring the overall scale of market book profits. Currently, this indicator has surpassed the +2σ range, a level that historically often coincides with the market entering a frenzy phase. This environment is typically accompanied by a significant increase in volatility, and the duration is often short, with only 16% of trading days' book profits exceeding this level.
In the face of such a highly profitable situation, profit-taking activities have clearly increased, which can be observed through the "volatility-adjusted net realized profit/loss" indicator.
This indicator measures realized profits and losses in terms of Bitcoin, periodically comparing it to the continuously growing market capitalization of Bitcoin, thereby achieving standardization. Additionally, this indicator is adjusted based on the 7-day realized volatility.
As the price breaks through the previous historical high, the phenomenon of profit-taking has significantly increased, with only 14.4% of trading days showing higher values. This indicates that profit-taking has increased, but has not yet reached extreme levels.
This result is also reflected in the SOPR indicator, which reflects the degree of asset profit/loss and can be used to determine whether the selling price of an asset is higher than its buying price. The recent historical high has led to a significant increase in locked profits, with an average profit of +16% per token. For investors, trading days with profit levels exceeding this threshold are less than 8%, indicating that investors are massively shifting towards profit-taking activities. However, it has not yet reached the level of extreme euphoria that occurred during the previous price peak.
Exchange activities increase
Centralized exchanges remain the primary venues for trading and speculation, with daily capital inflows and outflows ranging between 4 billion and 8 billion dollars. The deposit and withdrawal volumes of exchanges can serve as a measure of investors' willingness to trade Bitcoin compared to the total transaction volume settled on-chain.
Since reaching a historical high of $109,000 in early 2025, the dominance indicator of exchange trading volume has been on the rise, and this ratio continues to climb as the market rebounds. Currently, about 33% of the trading volume on the Bitcoin network interacts with centralized exchanges.
This marks a significant increase in investor demand and trading activity, consistent with the market entering a new price discovery phase.
By combining on-chain token price tags with Glassnode's centralized exchange address labels, one can estimate the average profit and loss of tokens deposited in exchanges. This can provide more detailed insights into investor sentiment and trading behavior directly related to exchange activities.
Currently, among the tokens deposited in the exchange, the average profit of profitable coins is about 9300 dollars, while the average loss of losing coins is only 780 dollars. This difference indicates that current trading behavior is primarily profit-driven, reflecting a significant change in investor sentiment.
The average profit is 12 times the losses, and the ratio between the two is close to the extreme levels commonly seen in the most active phases of past bull markets. The extreme levels of the average profit-loss ratio on exchanges further indicate that the market is entering a frenzied stage of the bull market.
Derivatives leverage level rises
With the increasing activity of centralized exchanges, it has become increasingly important to examine the derivatives market, which helps to understand the level of leverage accumulated in a bull market environment.
Since hitting a local low of $74,000 in April, the open interest in futures contracts has significantly increased from $36.8 billion to the current $55.6 billion. In just the past 49 days, it has increased by $19 billion (a 51% growth), indicating that leverage levels are rising.
At the same time, the open interest in options contracts surged from $20.4 billion to $46.2 billion, setting a new historical record. The increase of $25.8 billion is significantly higher than the growth in open interest in the futures market.
The rapid increase in open interest for options contracts reflects the growing maturity of the investor community, which is increasingly utilizing options contracts to implement more complex strategies to optimize their risk management and trading positions.
ETF fund inflow remains strong
In terms of spot ETFs, buyers have been continuously purchasing since late April, and the demand remains strong. In the past week, the daily fund inflow into ETFs exceeded 300 million USD.
The large-scale and continuous buying from retail and institutional investors indicates that they are still confident in the asset, and it has been an important driving force behind the market's repeated record highs since its launch in 2024.
Price Discovery Exploration
As the price of Bitcoin returns to the price discovery phase, on-chain data and technical indicators can be combined to assess market momentum and identify potential signs of overheating.
The 111-day moving average (DMA) and the 200-day moving average are commonly used technical indicators for assessing the momentum and trend strength of the Bitcoin market. This can also be supplemented by the on-chain metric of short-term holder cost, which reflects the average purchase price of new market investors. Historically, this level has been a key threshold, often used to distinguish between local bull and bear markets.
Currently, the price of Bitcoin is well above these three key levels, highlighting the strong rebound of the market since April. It is worth noting that these price levels are very close in value, and this convergence forms an intersection in the key support area. To maintain further upward momentum, it is crucial to hold this area.
In addition, the MVRV (Market Value to Realized Value Ratio) can be used to define price ranges, highlighting extreme deviations from the average investor cost. Historically, breaking through the +1σ range often corresponds with long-term macro top formations.
Currently, the price of Bitcoin is fluctuating within the +1σ and +0.5σ range. This indicates that the market is relatively active, but there is still room for further increases in Bitcoin until investors realize profits beyond the extreme level of +1σ. This extreme level typically triggers large-scale profit-taking activities, leading to a significant increase in selling pressure.
! On-chain data week review: Bitcoin hit a new high for the third time in the current cycle, or there may still be room to rise
Finally, the short-term holder cost around the +0.5σ and +1σ standard deviation range can be used to assess local overheating conditions.
Historically, the price has fluctuated within the above two ranges for 467 days, and above the +1σ level for 484 days, accounting for only 17.5% of Bitcoin's trading history. This makes entering this range relatively rare, typically serving as an upper limit for local price trends.
Although the MVRV +1σ level is usually associated with macro tops, the short-term holder cost basis (STH-CB) +0.5σ and +1σ ranges are more indicative of local top formation. Combining these models can provide a reliable framework for identifying market overheating conditions.
Summary
Bitcoin has reached a new historical high of $111,000, marking the third all-time high in this cycle. This milestone has triggered widespread activity across major sectors of the market, reflected in increased investor profits and profit-taking, enhanced exchange interactions, significant growth in open interest for futures and options, and sustained demand from buyers of spot ETFs.
As the market enters the price discovery phase, the price level of $120,000 appears to be a key area, and selling pressure is expected to accelerate in this area and its vicinity.
Related reading: Interpretation of six major indicators: What will be the price of Bitcoin by the end of this year?