92% Bitcoin holders are in profit – But the cracks are starting to show

Key Takeaways

Profitability is high, but valuation and scarcity metrics show weakening strength. Meanwhile, liquidity flows highlight uncertainty, leaving Bitcoin’s market outlook indecisive.

Bitcoin’s [BTC] Percent Supply in Profit climbed to 92%, a level that historically preceded bullish phases but also profit-taking risks. At this stage, most holders were in gains, suggesting broad market strength.

By the way, historically speaking, whenever profit supply crossed 90%, rallies extended further. Yet, corrections also occurred when enthusiasm peaked.

Investors now face a mixed scenario where optimism is abundant, but caution persists.

Having said that, sustainability still depended on whether buyers held firm or sellers seized the chance to lock in gains.

Falling NVM ratio causes a problem

The Network Value to Metcalfe Ratio (NVM) fell by 4.54%, showing cracks in Bitcoin’s valuation relative to network activity.

This metric compares market capitalization against the strength of active connections, often used to gauge fair pricing.

A decline suggested market value might be running ahead of network fundamentals. Historically, falling NVM ratios have often preceded slowdowns or weaker price expansions.

Even so, the network retained significant weight. Traders now weighed whether growth could sustain while network signals softened.

Source: CryptoQuant