Bitcoin May Face Greater Bear Market Risks If This Ratio Shrinks, According to Glassnode

In a recent report, on-chain analytics firm Glassnode discussed a notable decline in the liquidity of long-term Bitcoin holders amid the ongoing market downturn.

Key Takeaways

Glassnode reports a significant reduction in Bitcoin liquidity for long-term holders amidst current market challenges.
The STH Realized Profit/Loss Ratio indicates that new buyers are largely experiencing losses.
Long-term holders are still seeing profits but caution is advised should liquidity further diminish.
Bitcoin's current price is around $90,600, down 1.3% in the last week.

Bitcoin

Recent Decline in Bitcoin Long-Term Holder Liquidity Ratio

Glassnode's latest weekly update examines changes in liquidity within the Bitcoin market following recent downturns. Using the Realized Profit/Loss Ratio—an on-chain metric measuring the balance of profit and loss from Bitcoin transactions—the firm assesses current market demand.

To gauge demand momentum, they also consider a variation of this metric specific to short-term holders (STHs), or investors who bought their coins within the last 155 days. The accompanying chart illustrates that the STH Realized Profit/Loss Ratio was previously at healthier levels; however, since early October, it has dropped significantly.

Bitcoin STH Realized Profit/Loss Ratio
The data for the STH Realized Profit/Loss Ratio | Source: Glassnode's The Week Onchain – Week 47, 2025

Currently at just 0.07, this indicator is firmly in the loss territory, indicating that recent Bitcoin buyers are predominantly experiencing losses. Glassnode noted that “the dominance of losses signals a depletion of liquidity, particularly following the strong demand absorption witnessed in Q2–Q3 2025, as long-term holders began to spend more.”

This metric had also dipped to similar lows in the first quarter of 2022; however, the current market weakness hasn’t been as persistent. The report highlighted that ongoing low ratios may lead to a resemblance of past market conditions.

While short-term demand has diminished, long-term liquidity remains stable at this time. Long-term liquidity can be analyzed using the Realized Profit/Loss Ratio of long-term holders (LTHs), those who have held their coins for over 155 days.

Bitcoin LTH Realized Profit/Loss Ratio
The value of the metric has plunged recently | Source: Glassnode's The Week Onchain – Week 47, 2025

As shown in the chart, the 7-day exponential moving average (EMA) of the Bitcoin LTH Realized Profit/Loss Ratio has sharply decreased as Bitcoin's price has dropped. Despite this decline, the LTHs’ metric is currently valued at 408, indicating that they are, on average, realizing profits more than four times their losses. This suggests that long-term liquidity remains robust compared to early 2022 or any significant low points from the current cycle.

Glassnode cautions, however, that “if liquidity continues to deteriorate and this ratio compresses to around 10x or lower, the likelihood of entering a deeper bear market cannot be overlooked.”

It will be crucial to observe how the LTH Realized Profit/Loss Ratio evolves in the near future for Bitcoin and whether liquidity will continue to tighten.

Current Bitcoin Price

As of this writing, Bitcoin is trading at approximately $90,600, reflecting a 1.3% decrease over the past week.

Bitcoin Price Chart
The price trend of Bitcoin over the last five days | Source: BTCUSDT on TradingView