VanEck has released its latest Bitcoin (BTC) On-Chain Analysis. This report examines the recent sharp decline in Bitcoin’s price by analyzing on-chain metrics, with a special emphasis on the behavior of long-term holders and mining activities.
The findings reveal that Bitcoin’s value has dropped by nearly 29% over the past month. This downturn coincided with deteriorating market sentiment. The NUPL (Unrealized Net Profit/Loss) indicator, which measures profitability based on blockchain data, neared what is considered a “concern zone” and briefly dipped into the “fear zone.” Concurrently, there was a substantial liquidation of leveraged positions, and open interest in futures contracts decreased to levels unseen since September 2024. These movements suggest that excessive leverage within the market is being reduced.
Regarding investor distribution, most selling pressure originated from those holding Bitcoin between one and five years. Nevertheless, sales of Bitcoins held for longer than one year have slowed considerably during this period. This trend points to diminishing selling activity among long-term investors and hints at an emerging equilibrium in market dynamics.
On the mining front, profit margins are experiencing strain as evidenced by an almost 14% drop in total network hash rate over the last three months. Such declines typically indicate tightening conditions within mining operations. Historically, similar reductions have led to supply-side adjustments by pushing less efficient miners out of business—potentially setting up stronger price trends ahead.
VanEck concludes that although short-term price movements remain weak, underlying factors like reduced sales velocity from long-term holders and shrinking hash rates could foster a more robust market structure over time.
This information does not constitute financial advice.