On-chain analytics firm Glassnode has revealed in a report how long-term Bitcoin liquidity has witnessed a sharp decline alongside the market downturn.

Bitcoin Long-Term Holder Liquidity Ratio Has Plunged Recently

In its latest weekly report, Glassnode has talked about how liquidity in the Bitcoin market has changed following the recent downturn. Glassnode has gauged the “liquidity” using the Realized Profit/Loss Ratio, an on-chain metric that measures the ratio between the profit and loss that BTC investors are realizing through their transactions.

Current demand momentum can be tracked using a version of this indicator that specifically tracks the profitability of the short-term holders (STHs), investors who purchased their coins within the past 155 days.

As the below chart shows, the STH Realized Profit/Loss Ratio was at relatively high levels earlier, but since early October, its value has plummeted.

With a value of just 0.07, the indicator is now sitting deep inside the loss region, a sign that the recent Bitcoin buyers have overwhelmingly been capitulating at a loss. “Such overwhelming loss dominance confirms that liquidity has evaporated, especially after the heavy demand absorption seen in Q2–Q3 2025 as long-term holders increased their spending,” explained the analytics firm.

The metric fell to similar lows back in Q1 2022, but so far, market weakness hasn’t been as prolonged. The report noted that if the ratio continues to be depressed, market conditions could mirror those from back then.

While short-term demand momentum has collapsed, the same hasn’t been true for long-term liquidity, at least not yet. Long-term momentum can be measured using the Realized Profit/Loss Ratio of the long-term holders (LTHs), representing the more resolute section of the market (holding time greater than 155 days).

From the above chart, it’s visible that the 7-day exponential moving average (EMA) of the Bitcoin LTH Realized Profit/Loss Ratio has witnessed a sharp decline as BTC has crashed.

Despite the drop, however, the metric’s value is still 408, implying LTHs are realizing, on average, a profit that’s 408 times the loss. This means that the long-term liquidity is still healthy compared to Q1 2022, or even the major bottom formations from the current cycle.

Glassnode warned, however, “if liquidity continues to fade and this ratio compresses toward 10x or lower, the probability of transitioning into a deeper bear market becomes difficult to ignore.”

It now remains to be seen how the LTH Realized Profit/Loss will change for Bitcoin in the near future, and if liquidity will see a further squeeze.

BTC Price

At the time of writing, Bitcoin is trading around $90,600, down 1.3% over the past week.

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Filed under: Bitcoin - @ November 28, 2025 3:00 am