The Bitcoin market is showing signs of a prolonged consolidation phase, driven by miner economic stress and compressed on-chain valuation metrics. The Puell Multiple, an indicator tracking miner revenue relative to its yearly average, remains firmly in the "Discount Zone," signaling sustained revenue compression and structural selling pressure from miners.
Analyst Gaah from CryptoQuant notes that historical Discount phases last approximately 200 days, and current positioning suggests the market is roughly halfway through this duration. This reframes expectations from an immediate recovery to a gradual, time-driven adjustment. During such phases, price action tends to be choppy and range-bound, with Bitcoin struggling to maintain breakouts as volatility compresses.
The selling pressure is necessity-driven, not panic-driven. Miners are liquidating reserves to cover operational costs and service debt, with total miner reserves continuing a multi-year decline to around 1.8 million BTC. Each short-term price rally provides liquidity for miners, reinforcing resistance levels and prolonging the sideways-to-downward price trend. This creates a feedback loop where reduced revenue triggers reserve selling, which in turn limits upward momentum.
Concurrently, the Bitcoin MVRV Z-Score, an on-chain metric comparing market cap to realized cap to gauge over/undervaluation, has compressed to levels not seen since October 2023 when Bitcoin traded near $29,000. Glassnode analyst Chris Beamish described this as a "solid reset in unrealised profitability," with the market reverting toward fair value after prior expansion. The Z-Score has fallen below 1, though it remains above zero, indicating investors are still in net profit but at significantly reduced levels.
Further underscoring thin market conditions, Glassnode data shows the 90-day moving average of the ratio between realized profits and losses on the Bitcoin network has declined to 1.5, nearing the neutral level of 1. At the time of reporting, Bitcoin was trading around $76,000, down 15% over the previous week. Historical patterns suggest that when the MVRV Z-Score compressed to similar levels in the previous cycle, Bitcoin experienced further declines during the 2022 bear market.
