Bitcoin Upside Hinges On Liquidity Rising Above This Level, Glassnode Says

A report from on-chain analytics firm Glassnode has highlighted how transitions into strong upside phases have historically required liquidity to hold above a key threshold.

Bitcoin Rally Could Require Realized Profit/Loss Ratio To Rise Above 5

In its latest weekly report, Glassnode has talked about liquidity conditions present on the Bitcoin network as the asset’s price has gone through a drawdown following its failed recovery attempt earlier in the month.

“Any meaningful transition back toward a sustained rally should objectively be reflected in liquidity-sensitive indicators such as the Realized Profit/Loss Ratio (90D-SMA),” explained the analytics firm. The Realized Profit/Loss Ratio refers to an indicator that, as its name suggests, compares the realized profit and loss that BTC investors realize from their transactions.

When the value of this metric is greater than 1, it means the holders as a whole are realizing a higher amount of profit than loss. On the other hand, the indicator being under the threshold suggests loss-taking is dominant on the network. Naturally, if the Realized Profit/Loss Ratio is exactly equal to 1, the average holder can be assumed to be just breaking even on their selling, with profits and losses being harvested on the blockchain exactly canceling each other out.

Now, here is a chart that shows the trend in the 90-day moving average (MA) of this Bitcoin indicator over the past decade:

As displayed in the above graph, the 90-day MA Bitcoin Realized Profit/Loss Ratio hit a peak during the second half of 2025 as investors exited with gains in the bull run. Since this high, however, the indicator has seen a sharp decline.

At the peak, the metric’s value reached close to 20, indicating profits outweighed losses by nearly 20 times, but recently, it has slipped all the way down to a level less than 2. Profit-taking is still dominant in the sector from the perspective of the indicator, but profits are less than double the losses now.

According to Glassnode, transitions into strong upsides have historically required this metric to rise and hold above a value of 5. Currently, the metric’s trajectory is still pointing down, so it’s uncertain whether it will see any improvement in the near future and if it does, whether it will climb back above this threshold.

That said, twice in this cycle alone, Bitcoin liquidity has gone under this level and managed to return above it. Though in both of those instances, it found a bottom at levels noticeably above the current value.

BTC Price

At the time of writing, Bitcoin is floating around $87,800, down 2.4% over the last seven days.