Terrill Dicki
May 13, 2025 04:06
Bitcoin witnesses a high-risk, high-reward market structure with 94% of supply in profit, as prices soar to new highs. Insights on spot-driven rallies and derivatives market trends.
The Bitcoin (BTC) market is currently navigating a high-risk, high-reward environment as 94% of its supply is now in profit, according to insights from Glassnode. The Network Value to Transaction (NUPL) is nearing euphoric levels, and the Realized Profit/Loss ratio has risen to an elevated 2.38, indicating strong incentives for investors to realize gains.
Spot Market Dynamics
This week, Bitcoin reached new highs near $104.7K, driven by a distinct spot market rally. The price momentum remains elevated, with a shift in Spot CVD to a positive stance and a rebound in spot volume, suggesting significant buy-side pressure from aggressive market participants. Additionally, ETF inflows continue to bolster the spot trend, although trade volumes are beginning to show signs of cooling.
Derivatives Market Trends
In contrast, the derivatives markets, especially futures, initially lagged the rally. Open interest has been recovering slowly, and funding rates have only recently turned positive. Nevertheless, perpetual CVD indicates that the futures market is catching up, with a steady rise in net long positions since the March lows. Options markets mirror this bullish sentiment, with increased open interest, a recovering volatility spread, and a deeply negative skew, reinforcing a directional bias while highlighting elevated positioning risks.
On-Chain Activity
From an on-chain perspective, fundamental metrics such as active addresses and transfer volumes are experiencing slow yet constructive growth, while fee pressures remain modest. Liquidity metrics present a mixed outlook; realized cap is recovering, and HODLing behavior is dominant with a low Short-Term Holder/Long-Term Holder (STH/LTH) ratio. However, the inflow of hot capital remains subdued, indicating hesitancy among new demand entrants.
The market’s current structure, characterized by high risks and potential rewards, could persist if demand continues to build, particularly from new entrants responding to the rally. This scenario could mirror previous bullish phases if sustained over the coming weeks.
For further details, readers can access the full report on Glassnode.
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