Bitcoin's Future Growth Depends on Liquidity Levels, According to Glassnode

A recent report from the on-chain analytics firm Glassnode has emphasized the importance of liquidity levels in determining the potential for Bitcoin to enter strong upward cycles.

Key Takeaways

Glassnode highlights the necessity of liquidity for Bitcoin's upward trends.
The Realized Profit/Loss Ratio is a critical metric, indicating the balance of profits versus losses among investors.
Historically, an upward trend in Bitcoin requires this ratio to exceed 5.
Currently, Bitcoin's price is around $87,800, showing a slight decline in the past week.

Bitcoin

Understanding the Relationship Between Bitcoin Price and Liquidity

In Glassnode's latest weekly analysis, the firm discussed how the liquidity situation on the Bitcoin network impacted its price, particularly after a recent downturn following a failed recovery attempt.

For Bitcoin to transition back into a sustained rally, it is essential that liquidity-sensitive metrics, like the Realized Profit/Loss Ratio (90-day Simple Moving Average), reflect positive trends. The Realized Profit/Loss Ratio measures the profits and losses that Bitcoin investors experience from their transactions.

A value greater than 1 indicates that, on average, holders are realizing more profit than loss. Conversely, if the ratio falls below 1, it suggests that losses are dominating. When the ratio equals 1, it indicates that the average investor is breaking even, where profits and losses cancel each other out.

Here is a chart illustrating the trend in the 90-day moving average of this Bitcoin indicator over the last decade:

Bitcoin Realized Profit/Loss Ratio
The value of the metric has experienced a significant decline in recent months | Source: Glassnode’s The Week Onchain – Week 4, 2026

The chart shows that the 90-day moving average of the Bitcoin Realized Profit/Loss Ratio peaked during the latter half of 2025 as investors took profits during the bull run. Since that high point, there has been a notable drop in the indicator. At its peak, the value approached 20, revealing that profits were nearly 20 times greater than losses. However, it has recently fallen to below 2, suggesting that while profit-taking is still present, it is less than double the losses at this point.

Glassnode indicates that historically, for Bitcoin to see significant upward momentum, the Realized Profit/Loss Ratio needs to rise and remain above 5. At present, this metric continues on a downward trajectory, leaving uncertainty about any potential improvements in the short term and if it will surpass the necessary threshold again.

Interestingly, during this market cycle, Bitcoin liquidity has temporarily dipped below this crucial level twice yet managed to rebound above it on both occasions. Nevertheless, in both of these instances, the previous lows were notably higher than the current levels.

Current Bitcoin Price Status

As of the latest updates, Bitcoin's price is hovering around $87,800, having decreased by 2.4% over the past week.

Bitcoin Price Chart
Price trend of Bitcoin over the last month | Source: BTCUSDT on TradingView