The Bitcoin (BTC) market has shown remarkable resilience in 2025, rallying nearly 30% since early April and pushing prices toward the psychological $100,000 mark. While this surge has reignited bullish sentiment among investors, key on-chain indicators are flashing warning signs that the current uptrend might not signal a new leg of growth—but rather the final breath of an ending cycle.
By analyzing three critical on-chain metrics—Net Unrealized Profit/Loss (NUPL), transaction and address activity, and the Market-Value-to-Realized-Value (MVRV) ratio—we uncover compelling evidence of bearish divergence. These patterns have historically preceded major market tops, suggesting that what looks like momentum could instead be a relief rally before a broader correction.
Understanding these signals is essential for traders and long-term holders alike, especially in a landscape where price action can mask underlying weakness.
👉 Discover how on-chain data reveals the true health of Bitcoin’s market cycle.
Net Unrealized Profit/Loss (NUPL): Euphoria Fading
The Net Unrealized Profit/Loss (NUPL) indicator measures the aggregate unrealized profit or loss across all Bitcoin holders, normalized by market capitalization. It serves as a powerful sentiment gauge:
- Values above 0.75 indicate widespread euphoria.
- Readings between 0.5 and 0.75 suggest greed or optimism.
- Below 0.5, fear and capitulation typically dominate.
Historically, Bitcoin market cycle peaks have occurred when NUPL exceeded 0.6, often spiking into the 0.75–1.0 range during parabolic phases. In the current cycle, NUPL peaked at 0.64—twice—and now stands at 0.59, still elevated but showing a critical flaw: bearish divergence.
Since March 2025, while Bitcoin’s price continued to climb, NUPL failed to make a new high, forming a lower peak. This disconnect suggests that fewer investors are sitting on substantial profits compared to earlier in the cycle, weakening the foundation of the rally.
More concerningly, NUPL recently dipped below 0.5—a level that has historically marked the beginning of bear markets. Although brief breakdowns below this threshold have occurred in the past (often false alarms), sustained readings or repeated breaks typically confirm a shift in trend.
This divergence mirrors patterns seen before the 2017 and 2021 cycle tops, reinforcing the possibility that the current rally lacks broad-based strength.
Declining Network Activity: Price Rise Without Participation
A healthy bull market is characterized not just by rising prices, but by increasing adoption and network usage. However, two fundamental on-chain metrics—daily transactions and active addresses—tell a different story.
Between March and October 2024, Bitcoin’s daily transaction count reached new highs, reflecting strong user engagement. But since then, transaction volume has steadily declined—even as the BTC price surged to fresh all-time highs in early 2025.
This creates a classic bearish divergence: price up, on-chain activity down.
Similarly, the number of active addresses—those sending or receiving BTC within a 24-hour window—peaked in March 2024 and has trended downward ever since. This erosion in user activity suggests that the current price movement is being driven more by speculative trading and large whale movements than organic demand from retail participants.
When network fundamentals fail to confirm price action, it raises questions about sustainability. In previous cycles, such decoupling preceded major corrections.
👉 See how real-time blockchain data can help you time market shifts more accurately.
MVRV Ratio: Asset Overvaluation Without Confirmation
The Market-Value-to-Realized-Value (MVRV) ratio compares Bitcoin’s current market value to its realized value—the average cost basis of all coins based on when they were last moved.
- An MVRV above 3.7 has historically signaled overvaluation and imminent tops.
- A ratio above 2.0 indicates overbought conditions.
- Below 1.0, Bitcoin is typically undervalued.
In March 2024, the MVRV ratio hit a cycle high of 2.74, aligning with strong price momentum. However, despite Bitcoin surpassing that price level again in January 2025, the MVRV ratio failed to follow suit—peaking lower.
This bearish divergence suggests that many coins now being traded were acquired at higher prices than before, reducing overall profitability and investor incentive to hold.
Moreover, as April’s rally unfolded, MVRV lagged significantly behind price gains. This means that even if BTC reaches $100,000, the underlying valuation metrics may not support a new all-time high in terms of investor profitability—a red flag for long-term sustainability.
Is a New All-Time High Still Possible?
While Bitcoin’s technical strength remains undeniable, the confluence of three independent on-chain indicators pointing to bearish divergence cannot be ignored.
- NUPL shows weakening profit levels despite higher prices.
- Transaction and active address data reveal declining user engagement.
- MVRV confirms that valuations are stretched without fundamental backing.
Together, these signals suggest that the current rally lacks the structural support seen in earlier phases of past bull runs. Instead of a breakout into new territory, this may be a relief rally—a final push fueled by sentiment and short-term speculation rather than robust network fundamentals.
One counterpoint worth noting is the absence of a confirmed bearish signal from the Pi Cycle Top indicator, which historically combines halving cycles and moving averages to predict market peaks. Its silence offers a sliver of hope for bulls, but it remains an outlier against mounting on-chain evidence.
Frequently Asked Questions (FAQ)
Q: What is bearish divergence in crypto markets?
A: Bearish divergence occurs when an asset’s price makes a higher high, but a supporting indicator (like NUPL or MVRV) makes a lower high. This disconnect suggests weakening momentum and often precedes reversals.
Q: Can Bitcoin still go to $100,000 despite these warnings?
A: Yes—price can continue rising in the short term due to macro factors, ETF inflows, or sentiment. However, without confirmation from on-chain fundamentals, such moves may be unsustainable long-term.
Q: What does NUPL below 0.5 mean for Bitcoin?
A: A NUPL below 0.5 indicates that most holders are either at break-even or underwater. While this can signal capitulation, repeated breaks below this level often mark the start of bear markets.
Q: How reliable are on-chain indicators like MVRV?
A: MVRV has historically been effective at identifying overvalued market conditions. While not perfect, it becomes more reliable when combined with other metrics like NUPL and transaction volume.
Q: Are declining transactions always bad for Bitcoin?
A: Not necessarily. Lower transaction counts can result from increased use of Layer-2 solutions or reduced speculative trading. But sustained drops during price rallies are concerning.
Final Thoughts
Bitcoin’s journey toward $100,000 continues to captivate investors worldwide. Yet beneath the surface, on-chain data reveals cracks in the foundation of this rally.
With NUPL, transaction volume, and MVRV all showing bearish divergence, the evidence increasingly supports the view that the current market cycle may already be over. What we’re witnessing could be the last gasp of a maturing bull run rather than the beginning of a new one.
For informed investors, this is not a call to panic—but a prompt to scrutinize not just price charts, but the deeper metrics that reveal Bitcoin’s true health.
👉 Access advanced on-chain analytics tools to stay ahead of market cycles.
Core Keywords:
Bitcoin market cycle
BTC on-chain analysis
NUPL indicator
MVRV ratio
bearish divergence
Bitcoin price prediction
active addresses
transaction volume