Bitcoin (BTC) Market Analysis: High-Risk Structure Amid Surging Prices

Bitcoin witnesses a high-risk, high-reward market structure with 94% of supply in profit, as prices soar to new highs. Insights on spot-driven rallies and derivatives market trends.

Bitcoin (BTC) has moved into a high-risk, high-reward market structure as 94% of the cryptocurrency’s supply is now in profit, according to the latest report by Glassnode. The Network Value to Transaction (NUPL) is also nearing euphoric levels, and the Realized Profit/Loss ratio has risen to an elevated 2.38, highlighting strong potential for investors to take realized gains.

The latest market movements were largely driven by a distinct rally in the spot market, pushing Bitcoin to new highs above $104.7K this week. The price momentum remains elevated, with a shift in Spot CVD to a positive stance and a rebound in spot volume, suggesting significant buy-side pressure from aggressive market participants. Additionally, ETF inflows continue to bolster the spot trend, although trade volumes are beginning to show signs of cooling.

In contrast, the derivatives markets, especially futures, initially lagged the rally. Open interest has been recovering slowly, and funding rates have only recently turned positive. Nevertheless, perpetual CVD indicates that the futures market is catching up, with a steady rise in net long positions since the March lows.

Options markets mirror this bullish sentiment, showcasing increased open interest, a recovering volatility spread, and a deeply negative skew, reinforcing a directional bias while highlighting the positioning risks at these levels.

On the on-chain side, fundamental metrics like active addresses and transfer volumes are displaying slow yet constructive growth, while fee pressures remain contained. Liquidity metrics present a mixed picture; realized cap is recovering, and HODLing behavior is dominant with a low Short-Term Holder/Long-Term Holder (STH/LTH) ratio. However, the inflow of hot capital remains muted, suggesting hesitancy among new demand entrants.

Overall, the market's structure at these price levels presents a balance of risks and potential rewards. If demand continues to build, especially from new entrants who respond to the rally, this scenario could unfold into a structure similar to previous bullish phases, especially if sustained over the coming weeks.