On-chain Indicators Show Bitcoin Market Reset, Excess Leverage Flushed in Q4
Coinbase and Glassnode report that Bitcoin (BTC) entered 2026 on firmer footing after excess leverage was largely flushed out during Q4 2025. Key on-chain metrics point to healthier market structure: entity-adjusted NUPL fell from “Belief” to “Anxiety” after the October sell-off but stabilized, realized price continued to rise meaning the market cost basis increased, and spot price remains above realized price, keeping the average holder in profit. MVRV sits near 1.5 (roughly 50% premium to on-chain cost basis). In Q4, the share of BTC supply held in profit dropped sharply, suggesting accumulation in the $80k–$85k range for model-based strategies. Three-month active supply rose 37% while supply dormant for >1 year fell 2%, implying higher supply velocity and distribution. The Puell Multiple declined to 0.9, indicating miner revenue was about 10% below the prior-year average. Net long-term holder positions and exchange-balance changes signaled profit-taking earlier in July–September but were less evident in Q4. Taken together, these signals suggest reduced systemic leverage, constrained miner profitability, and renewed accumulation dynamics — factors traders should weigh when sizing risk and positioning around the $79k–$85k area.
Bullish
The report highlights reduced systemic leverage (excess leverage flushed in Q4), rising realized price, spot price remaining above realized price, and accumulation behavior around $80k–$85k. These are bullish structural signals: lower leverage reduces crash risk from forced liquidations, rising realized price and positive MVRV indicate continued holder profitability, and increased short-term supply movement combined with falling long-dormant supply suggests active re-distribution into stronger hands rather than capitulation. Miner stress (Puell Multiple ~0.9) is a caution, but historically similar resets (post-leverage flushes) precede steadier uptrends as volatility normalizes and liquidity returns. Short-term, traders should expect reduced tail-risk and potential consolidation in the $79k–$85k range; momentum trades could resume if spot price decisively breaks above prior accumulation levels. Long-term, improved on-chain health supports continued bullish case for BTC, though miner revenue weakness and macro risks remain downside catalysts to monitor.