Bitcoin's On-Chain Metrics Signal Market Stabilization After 25% LTH Buying Spree

A structural reset is underway across Bitcoin’s (BTC) on-chain metrics, with several key indicators returning to historical equilibrium levels, signaling a broad flush of speculative excess. This adjustment is evident in metrics such as the MVRV ratio, sopr, and the Sell-Side Risk Ratio, which now point to reduced investor euphoria, balanced profit-taking, and consolidation near cost basis levels. This collective reset suggests that the recent drawdown has transitioned from a volatile correction into a stabilizing phase, potentially setting the foundation for the next sustained market move.

Bitcoin’s upward momentum faced resistance while attempting to reestablish footing above the $93,000 to $95,000 zone. This level aligns with the lower bound of a multi-month consolidation range observed from November 2024 to February 2025. Price action has recently broken out of its downward trend, setting a higher high, which signals a possible structural reversal. The current consolidation aligns with critical technical levels, including the 111-day moving average (111DMA) and the Short-Term Holder (STH) cost basis, calculated at $91,300 and $93,200, respectively. Bitcoin is trading above both thresholds, a condition that marked regime transitions in past cycles. However, it is cautioned that holding above these levels is essential, as a retreat below them would reintroduce unrealized losses across the short-term investor base.

A structural reset across several on-chain indicators reflects a flush of speculative excess and a shift toward more neutral positioning. The MVRV ratio, which compares market value to realized value, has reverted to its long-term mean of 1.74, similar to drawdown behavior recorded during the August 2024 sell-off. This reset implies that average investors have returned to a breakeven point, reducing the incentive for large-scale capitulation or euphoric profit-taking. In parallel, the proportion of supply held in profit remains at 88%, with most losses limited to coins between $95,000 and $100,000. This metric has also bounced back to its historical average, indicating stabilization in investor positioning.

Spending patterns analyzed through the Realized Profit/Loss Ratio and SOPR suggest neutral sentiment has given way to modest profit realization, indicating a market that is once again absorbing sell-side volume. The Sell-Side Risk Ratio confirms low volatility conditions. This metric remains at suppressed levels, suggesting that most on-chain spending occurs on or near cost basis, conditions often preceding an impulse. BTC changing hands at equilibrium price levels is a sign of indecision and a precursor to volatility compression in the coming days.

Investor behavior further supports a consolidation narrative. Long-Term Holders (LTHs) have increased their holdings by 254,000 BTC since the recent low, with many coins acquired at prices above $95,000. This cohort continues to show minimal spending activity, indicating strong conviction and reduced sensitivity to short-term price fluctuations. The report estimates that the average LTH would begin facing increased incentives to distribute holdings when unrealized gains reach 350%, which corresponds to a spot price near $99,900. This makes the $95,000 to $100,000 range, where Bitcoin is currently trading, a critical resistance zone. Investors with entry points near these levels may look to exit at breakeven, which could potentially compound sell-side pressure. Above the $100,000 mark, fewer coins exist with a cost basis, implying lighter resistance and potentially smoother conditions for price discovery.

For now, the Bitcoin market has undergone a comprehensive structural reset, with on-chain data indicating a reduction in speculative froth and improved market equilibrium. This stabilization suggests that the market is transitioning from a phase of high volatility to one of more balanced and sustainable growth, setting the stage for future price movements.