Recently, on-chain data shows that Bitcoin is giving some interesting signals. BTC price is currently moving around the $78,000 level, about 38% below the October high of $126,000. But what’s more noteworthy is that the realized market cap, which had been rising for over two years, has recently stopped increasing.

To briefly explain what PnL means, it’s a profitability index that combines various indicators like the MVRV ratio and NUPL, and it has entered a neutral zone. Long-term holders have been taking profits since early 2024, and so far, they’ve realized profits totaling around 3.27 million BTC, which is a huge scale. While spot ETFs and institutional buying have absorbed this selling volume so far, that inflow has almost stopped now.

An interesting point is that since December, investors have entered a zone of net realized losses. They’ve realized about 69,000 BTC worth of losses, and the annual net profit has dropped from 4.4 million to around 2.5 million. This is similar to the level in March 2022, indicating the market is sending quite a weak signal.

What’s intriguing here is the analysis that, unlike past cycles, a 70% crash is unlikely. Large amounts of Bitcoin held by institutions are not collateralized, and the maturity of convertible bonds is after 2027, so there’s currently no forced selling pressure. Instead, it’s more likely that the market will consolidate in a sideways range rather than a sharp rebound.