On-chain analytics reveal a concerning divergence in Bitcoin's market health. CryptoQuant's Network Activity Index, which combines metrics like active addresses, transactions, UTXO count, and bytes per block, has been in a sustained downtrend. According to analyst Maartunn, the index has remained below its 365-day moving average, a pattern historically associated with bearish phases. This decline in network activity persisted even during Bitcoin's rally to new all-time highs in 2025, suggesting weak underlying demand for using the blockchain.
Simultaneously, the total Bitcoin supply in profit has compressed to a range historically linked to market cycle resets. As of Thursday, the metric stands at 60.6%, having dropped to 50.8% on February 5—its lowest level since January 2023. Historically, when profitability fell to similar levels (51% in January 2023 and below 50% in March 2020), it preceded massive rallies of 655% and over 960%, respectively. This 50–60% range indicates a large portion of holders are near their cost basis, which typically reduces sell pressure.
However, a key market shift is evident. While overall supply profitability is near cycle lows, the Long-Term Holder Net Unrealized Profit/Loss (LTH-NUPL) remains elevated at around 0.40, meaning long-term investors are still comfortably in profit. This gap is attributed to the growing share of Bitcoin held by corporate entities and spot ETFs, which collectively control approximately 15.8% of the circulating supply (3,319,677 BTC). These institutional holders have longer time horizons and lower sensitivity to short-term price swings, reducing forced selling pressure compared to past cycles.
Supporting data shows a reduction in reactive selling. Short-term holder inflows to Binance fell sharply to 25,000 BTC on March 25, down from roughly 100,000 BTC during the February sell-off. Analysts note that valuation models like MVRV below 1, NUPL under -0.2, and a Puell Multiple near 0.35 highlight zones where downside risk has historically been limited. At the time of reporting, Bitcoin's price was floating around $70,900, up more than 2% in 24 hours.
