Bitcoin Market Update: Cooling Momentum and Rising Unrealized Gains
By Jessie A. Ellis
May 5, 2025 | 21:35
Bitcoin (BTC) has been riding a wave of speculative interest, but recent data from Glassnode reveals a noticeable cooling in the market dynamics. This shift comes at a time when unrealized gains are rising, making investors more sensitive to potential risks ahead. Here at Extreme Investor Network, we’re committed to bringing you unique insights into these developments, helping you navigate the evolving crypto landscape.
Analyzing Market Trends
After a significant rally that surged Bitcoin prices toward $97,000, the market is now starting to show signs of fatigue. The most telling indicators are the sharp decline in the Spot Cumulative Volume Delta (CVD) and a decrease in daily trading volume, which has dropped to around $6 billion. This downturn reveals a dwindling conviction among buyers, setting the stage for a period of consolidation.
In the derivatives space, perpetual futures have experienced noteworthy unwinding. Although CVD and funding rates have receded from their peaks, the absence of a substantial uptick in long positions signals caution among investors. The combination of these factors creates a nuanced scenario where the overall sentiment appears constructive yet wary.
Profitability Metrics Highlight Caution
On-chain metrics paint an intriguing picture of market profitability. Currently, the Percent Supply in Profit stands at an impressive 88%. Meanwhile, the Net Unrealized Profit/Loss (NUPL) metric remains stable at 0.53, and the Realized Profit/Loss Ratio has surged to 2.38. While these numbers indicate that many participants are in profit, they also suggest a growing inclination toward profit-taking—a behavior that could exacerbate selling pressure should market conditions shift.
Here at Extreme Investor Network, we emphasize the importance of understanding these profitability metrics, as they could significantly impact trading strategies. For instance, with a high percentage of participants in profit, a mere spark—such as geopolitical developments or regulatory changes—could trigger a wave of sell-offs.
Synthesizing Off-Chain and On-Chain Insights
Our analysis also extends to off-chain indicators such as exchange-traded fund (ETF) flows and options market trends. Though ETF flows remain positive, they have noticeably diminished from their peak levels. This declining interest in ETFs aligns with the less enthusiastic attitude observable in options markets, where open interest is slipping, and negative volatility spreads are becoming more pronounced.
Together, these off-chain and on-chain insights construct a holistic view of Bitcoin’s current landscape. While the macroeconomic outlook remains positive, the cooling speculative momentum poses challenges that savvy investors must address.
Conclusion: Staying Ahead of the Curve
In conclusion, the latest market conditions suggest that while there is a generally favorable macro outlook, caution is warranted. The growth in unrealized gains presents both opportunities and vulnerabilities, emphasizing the need for vigilance in trading decisions.
At Extreme Investor Network, we pride ourselves on delivering actionable insights and critical analyses to ensure you remain one step ahead in the ever-changing world of cryptocurrency. Stay tuned for more updates and in-depth analyses that help you seize market opportunities while navigating potential risks.
For a deeper dive into the metrics discussed, check out the complete report from Glassnode. Your investment journey deserves the best insights—let us be your guiding light in the cryptocurrency realm.