Summary Bitcoin currently trades at ~$84,000, down 23% from its recent ATH of $109,000. On-chain analysis (NUPL, holder behavior) indicates the current correction resembles previous healthy pullbacks rather than signaling a prolonged bear market. Institutional adoption, notably Citadel Securities' entry, strengthens long-term bullish fundamentals. Editor's note: Seeking Alpha is proud to welcome Node Analytica Research as a new contributing analyst. You can become one too! Share your best investment idea by submitting your article for review to our editors. Get published, earn money, and unlock exclusive SA Premium access. Click here to find out more » Bitcoin (BTC-USD) is currently at a price level of 84,000 USD, 23% below its ATH (109,000 USD) reached on Monday 20 January 2025, 60 days ago. In these 60 days, it has marked a local low of 76,000 USD as can be seen in the image below. The question here is, is Bitcoin entering a bear market, or is this a typical bull market correction, and will it continue to rise? We will address this by analyzing recent chain data, ignoring for a moment, that risk assets are influenced by macroeconomic factors, such as the recent proposed US tariffs. Price evolution (TradingView) What has happened in the chain? In the following graph, we compare the profit realised by STH (Short-Term Holders - seniority 155 days) when the circulating Bitcoin supply (orange) was at 95% or more in profit. We can see that there are sales and consequently profits made by holders at these points (green bars). The maximum profit-taking points in the 2018 and 2021 cycles have coincided with market caps or ceilings. In this cycle (from 2022 onwards) there are two major selling points, one at USD 74,000 levels and the other at USD 100,000. This was seen in the 2021 cycle, albeit less strongly in the second peak of realized gains. With this, we can conclude that a prior sufficient profit taking has occurred to consider a cycle change. Realized Profit vs Supply (Node Analytica) In the following image, we study the profit realized by bitcoin holders with respect to the NUPL (Net Unrealized Profit & Loss - color line). Here we filter by the peaks that have historically marked the top of Bitcoin cycles (NUPL: 0.72), which coincide exactly with extreme profit taking. In this last cycle those NUPL ratio peaks have not been reached, so we can expect that the market has not yet warmed up enough and there are Short-Term Holders who have sold as soon as they have taken profits. NUPL (Node Analytica) The BTC Net Realized Profit/Loss 30-Day Cumulative chart provides a clear overview of recent profit-taking and loss-taking activity in Bitcoin. It is evident that the red peaks coincide with significant local highs, indicating periods when holders have decided to make substantial profits. In the current cycle (2024-2025), two major profit realization events have been noted (around the psychological levels of $74,000 and $100,000), indicating significant profit taking. However, these events do not suggest the definitive end of the bull cycle. Instead, these corrections appear to reflect healthy and common patterns within an ongoing bull market. This lends further support to our primary thesis. The recent decline in Bitcoin prices is more likely to represent a strategic buying opportunity than the start of a prolonged bear market. Net Realized Profit & Loss Cumulative 30 day (Node Analytica) Below is a breakdown of the number of coins held by both STHs and LTHs. Historically, at market tops, the curves of the two lines have inverted until they are remarkably close together. This happens because the LTH investor, who is usually experienced, begins to make profits and a supply shift occurs from the hands of LTHs to STHs. In this cycle, although there has been a reversal of the two curves, we consider that it is insufficient to consider it an end of the cycle. Total Supply Held by LTH vs STH (Node Analytica) Continuing with our analysis, the next metric we propose is the Onchain P&L Index, developed by ourselves. It is calculated by linking three chain metrics, such as the MVRV (Market Value Realized Value, NUPL, LTH/STH Spent Output Profit Ratio) into one by means of a PCA (Principal Component Analysis). I won't dwell too much longer on the technical explanation so as not to bore the reader, but what the metric measures in general is the temperature of onchain activity at the profit or loss level. In this cycle, although we have briefly entered selling zones (coinciding with the profit taking discussed above), we believe that the metric is likely to return to that zone, with a corresponding price appreciation. On-Chain P&L Index (Node Analytica) On the other hand, and to conclude our presentation, we present the Bull-Bear Market Cycle Indicator metric. We have currently entered a ‘Bear’ market regime, but there are several reasons not to lose optimism despite this. The first is that, as the image shows, this cycle has not had any ‘Extreme Bull’ phases indicated by the red color, which is quite strange if we analyze previous cycles. The second important reason is that historically in bullish periods there have been corrections (30 - 35%) and we have entered ‘Bear’ regimes before reaching a market top. For all these reasons, we believe it is quite likely that Bitcoin has taken a breather, in order to continue its rise. Caused by the massive sales of some LTH at purely psychological levels (100,000 USD), the threats of the US government with its tariff hikes and the response of the financial markets to this new situation of tariff war. Bull - Bear Market Cycle Indicator (Node Analytica) Finally, institutional interest continues to grow significantly, exemplified by recent developments such as Citadel Securities' entry as a liquidity provider. Such moves by major financial institutions highlight a growing acceptance of Bitcoin as a legitimate asset class, prompting additional inflows from large-scale investors. Furthermore, increased institutional participation typically translates into enhanced liquidity, reduced volatility, and more stable price action over time. Regulatory clarity from influential global economies—most notably the United States, which continues to implement supportive measures—adds further legitimacy and attractiveness to Bitcoin investments. This regulatory backing is pivotal as it encourages wider institutional and retail investor confidence, effectively laying a strong foundation for sustained long-term growth in Bitcoin's valuation.
