- Bitcoin profitability collapses sharply as market enters late-stage stress phase
- Long-term holders see gains vanish while pressure builds across key metrics
- Historical patterns suggest more time needed before confirmed Bitcoin bottom
Bitcoin’s on-chain data has shifted sharply in recent months as profitability among long-term holders declined at a rapid pace. This transition reflects changing market conditions and signals a move away from the earlier profit-driven phase. Market participants now face a different environment shaped by reduced gains and growing pressure across key metrics.
According to CryptoQuant analyst Moreno, the current structure reflects a late-stage stress phase rather than full capitulation. His observation follows a notable drop in long-term holder profitability from 58% to nearly 3% within roughly 140 days. This rapid compression highlights how quickly market sentiment can change once price momentum weakens.
Moreover, adjusted Net Unrealized Profit and Loss data shows that Bitcoin has moved from higher profitability zones into levels associated with anxiety. This shift suggests that many investors no longer hold strong unrealized gains. Consequently, selling pressure has gradually increased as confidence weakens across the market.
At the same time, price action has mirrored this transition with declining highs and unstable rebounds. This pattern indicates that demand remains cautious despite occasional recovery attempts. Additionally, the data suggests that stronger holders have started absorbing supply during this period of uncertainty.
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Historical Patterns Suggest Stress Phase Precedes Bottom Formation
Looking at previous cycles provides important context for the current situation. Historically, market bottoms have formed only after long-term holders enter net unrealized losses. These periods often extend between several days and many months depending on broader conditions.
For instance, earlier bear markets showed stress phases lasting between 6 and 277 days before a clear bottom emerged. During those periods, the market experienced prolonged weakness, reduced liquidity, and persistent uncertainty. Similarly, current metrics indicate that Bitcoin has not yet fully entered that deep loss zone.
Furthermore, the data shows that current levels remain close to the boundary between neutral sentiment and fear. This position suggests that the market has not reached full capitulation. Instead, it continues to navigate a transitional phase where pressure builds gradually.
Besides that, the decline in profitability highlights how quickly unrealized gains can disappear during downturns. As a result, investors often reassess positions, which contributes to ongoing volatility. This behavior aligns with previous late-cycle stress environments observed in earlier market structures.
Bitcoin’s on-chain data indicates that the market has entered a late-stage stress phase marked by declining profitability and cautious sentiment. Moreno’s analysis suggests that this environment still falls short of full capitulation, which means additional time or pressure may be needed before a confirmed bottom forms.
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