Bitcoin Could Be At Risk Of A Deeper Bear If This Ratio Compresses, Says Glassnode

Overview

On-chain analytics firm Glassnode has released a report indicating a significant decline in long-term Bitcoin liquidity amid the ongoing market downturn. The report highlights the implications of this trend for Bitcoin’s future market conditions.

Declining Liquidity in the Bitcoin Market

Glassnode’s latest weekly report discusses the changes in liquidity within the Bitcoin market following a recent downturn. The firm uses the Realized Profit/Loss Ratio to assess liquidity, which measures the ratio of profits and losses that Bitcoin investors realize through their transactions.

Short-Term Holder Trends

The report details a specific indicator that tracks the profitability of short-term holders (STHs), defined as investors who purchased Bitcoin within the last 155 days. According to the report, the STH Realized Profit/Loss Ratio was relatively high earlier but has significantly declined since early October. Currently, this ratio stands at a low value, indicating that recent Bitcoin buyers are predominantly realizing losses.

Glassnode notes that the dominance of losses among short-term holders suggests a substantial evaporation of liquidity. This trend follows a period of heavy demand absorption observed in the second and third quarters of 2025 when long-term holders increased their spending.

Long-Term Holder Metrics

In contrast to the trends among short-term holders, long-term liquidity appears to be more stable. The report measures long-term momentum using the Realized Profit/Loss Ratio for long-term holders (LTHs), who have held Bitcoin for more than 155 days. Despite a sharp decline in the 7-day exponential moving average (EMA) of the LTH Realized Profit/Loss Ratio, the metric remains high, suggesting that long-term holders are still realizing substantial profits compared to losses.

However, Glassnode cautions that if the liquidity continues to diminish and the LTH ratio compresses toward lower levels, the likelihood of entering a deeper bear market could increase significantly.

Impact on the Crypto Market

• The decline in short-term holder liquidity indicates that recent investors are facing significant losses.
• Long-term holder metrics remain relatively healthy, suggesting resilience among more established investors.
• If the liquidity situation deteriorates further, it could lead to prolonged bearish market conditions.
• The contrasting trends between short-term and long-term holders may influence investor sentiment and market dynamics moving forward.
• The current market environment requires close monitoring of the Realized Profit/Loss Ratios to gauge future Bitcoin performance.

Updated: 11/28/2025, 3:15:19 AM