92% of Bitcoin investors are making a profit – However, signs of a crack have surfaced.

The percentage of Bitcoin supply (BTC) that is in profit has reached 92% - a level often associated with bullish cycles, but also carries the risk of take profit pressure. This indicates that a majority of investors are currently holding profits, reflecting the widespread strength of the market.

In the past, whenever the profit supply ratio exceeded 90%, bullish trends were often extended. However, there have been numerous occasions when the market also witnessed strong corrections when the exuberant sentiment reached its peak. Currently, investors are facing a picture that is both full of hope and contains caution. The future of this trend will depend on whether the buying force continues to be maintained, or if the selling pressure from take profit will overwhelm.

NVM decline indicates an issue

The Network Value to Metcalfe Ratio (NVM) has just decreased by 4.54%, revealing signs of instability in how the market is valuing Bitcoin compared to the actual level of activity on the network.

This index measures the correlation between market capitalization and connectivity strength, which is considered an important measure for assessing reasonable valuation levels. A decline indicates that market value may be “running ahead” of operational fundamentals, raising concerns about the sustainability of the current bullish momentum. In the past, the downward trend of NVM has often been associated with slowing growth rates or signs of weakness in price expansion.

However, the Bitcoin network still maintains a significant scale and influence. The question now is whether the growth momentum has enough durability to continue, while signals from the network are showing signs of fatigue.

Source: CryptoQuant## The Stock-to-Flow model weakens, adding skepticism.

The Stock-to-Flow ratio (S/F) of Bitcoin has just plummeted by 42.86%, raising a big question mark for one of the most famous scarcity models in the market.

This index was originally designed to measure scarcity by comparing the circulating supply with the rate of new issuance, and is often regarded as a guiding indicator for bullish cycles. However, the current deep decline indicates that the momentum of scarcity has significantly weakened, while also deepening skepticism about supply-driven valuation arguments.

In fact, analysts have long argued fiercely about the reliability of the Stock-to-Flow model. And this latest drop further reflects the wavering confidence that the long-term value of Bitcoin can be sustainable solely due to scarcity.

Source: CryptoQuant## The money flow on the exchange exposes liquidity pressure

The spot deposit/withdrawal cash flow data shows notable liquidity fluctuations, with a positive net inflow of 39.13 million USD at the time of recording – reflecting a cautious sentiment in the market.

Typically, a continuous net inflow will increase the supply on the exchange, thereby creating stronger selling pressure. Conversely, when withdrawals occur regularly, it is often a signal of accumulation and reduces the risk of panic selling.

Recent Netflow data shows a state of hesitation in the short term: liquidity has not been completely drained, but there are also no clear signs of accumulation. Traders are currently watching whether inflows will continue to rise, opening up the risk of a correction, or whether outflows will regain dominance, thus reinforcing confidence in a bullish trend.

Source: CoinGlass## Will the bullish signal overcome the cracks?

Although the fact that 92% of the circulating supply is profitable reflects a widespread optimistic sentiment in the market, the 4.54% drop of NVM along with the 42.86% plunge in the Stock-to-Flow ratio exposes cracks in the pricing model and the scarcity hypothesis.

At the same time, the net inflow of capital to the exchange continues to ring the alarm bell about liquidity risks.

The intertwining of these conflicting signals indicates that Bitcoin is still struggling to establish a trend. As a result, the short-term outlook becomes uncertain, forcing investors to maintain a cautious attitude in the current sensitive context.

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