Here’s What It Means For Investors

Bitcoin is entering an interesting phase in its market cycle, where old market dynamics might be shifting.

Bitcoin’s (BTC) on-chain data indicates the market has entered a mature “speculative phase.” This means that the crypto asset could be in the later stages of the current bull cycle.

According to indicators, in particular, the Net Unrealized Profit/Loss (NUPL) ratio and the composition of Bitcoin’s Realized Cap, investor behavior is showing classic late-cycle traits.

“New Whales” Dominate

CryptoQuant observed that the NUPL stands at +0.52, a level which has been previously associated with the transition from optimism to euphoria, as seen during the 2017 and 2021 peaks. With roughly 97% of the circulating supply now in profit, confidence in the market is strong, though this also leaves limited room for further upside without a cooling period.

Meanwhile, short-term holders now represent 44% of Bitcoin’s realized capitalization. This is the highest on record, essentially meaning that long-term holders are taking profits while newer investors, the so-called “new whales,” are increasingly dominating market control.

In previous cycles, this shift from long-term to short-term holder dominance has marked the final expansion phase of a bull market. However, the current setup appears more complex. Institutional inflows through spot ETFs, expanding stablecoin liquidity, and broader market participation are helping to absorb sell pressure, resulting in a steadier form of speculative momentum. Overall, on-chain metrics portray a market driven by strong liquidity and sustained inflows, rather than retail exuberance alone.

Analysts suggest that a drop in the short-term holder share could signal the next major transition, depicting a move from speculation back toward accumulation, which is typically led by long-term investors preparing for the next cycle.

Caution Warranted

Santiment took a cautious stance as it found that Bitcoin is holding just above $113,000 amid mild bullish sentiment from traders. The last major move occurred Sunday when retail anticipated a drop below $100,000, which created an ideal buy zone. Price action often goes in the opposite direction of popular sentiment.

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Additionally, crypto analyst Ali Martinez noted that the crypto asset must reclaim $119,000 to sustain bullish momentum; failure could trigger a correction toward $96,530, according to Pricing Bands.