Unrealized Bitcoin Profit Proportion Soars to 80%, Yet Falls Short of Distribution benchmarks
As the global financial landscape heats up, analysts are predicting that the coming days will be pivotal for Bitcoin. In recent weeks, the cryptocurrency has been consolidating above the $109,000 level, following a clean bounce from the $103,600 support. This consolidation, combined with a sustained uptrend, suggests that Bitcoin could be gearing up for a significant move.
Several key factors are contributing to the potential Bitcoin breakout and further rally, as identified by on-chain data and market analysts.
**Relationship with Global Money Supply (M2)**
Bitcoin's price trajectory is increasingly correlated with the growth of the global M2 money supply, which includes cash, checking deposits, and other liquid assets. As global liquidity increases, investors often seek alternative assets like Bitcoin to hedge against inflation and economic uncertainty. The growth in M2, which surpassed $113 trillion in early 2025, has contributed to Bitcoin's rise, with the price nearing $180,000 at that point. Analysts note a 12-week lag between M2 supply changes and Bitcoin price movements, providing a predictive tool for anticipating future rallies.
**Technical Breakout Patterns**
Bitcoin has recently completed a textbook cup and handle pattern on its weekly chart. This pattern, which began in late 2021 and bottomed out in mid-2022, typically signals a strong bullish move. The breakout above the neckline (around $69,000), followed by a successful retest, has now converted this level into strong support, enhancing bullish sentiment and setting the stage for a potential move toward $320,000. The current rally is also aligned with wave five of a bullish Elliott structure, reinforcing the expectation of substantial upward price movement.
**Macroeconomic and Market Sentiment**
Expectations of Federal Reserve rate cuts are increasing, which tends to benefit cryptocurrencies and stocks by lowering the cost of borrowing and increasing liquidity in financial markets. Unexpected drops in oil prices have alleviated inflation concerns, supporting the case for potential rate cuts and risk asset rallies. Major moving averages are aligning bullishly, further reinforcing technical support for a bullish trend.
**Institutional and Regulatory Factors**
Accelerated adoption of Bitcoin ETFs is attracting more institutional and retail money into the market, as barriers to access continue to diminish. Progress on long-delayed crypto legislation is bolstering confidence among large firms, which are increasingly adding Bitcoin to their balance sheets.
In summary, Bitcoin's potential breakout and further rally are underpinned by a combination of macroeconomic factors (notably global M2 growth and monetary policy shifts), technical chart patterns, and increasing institutional adoption. These elements are converging to create a favorable environment for Bitcoin's continued upward momentum. The 30-day percentile of the Unrealized Profit/Loss (P/L) Ratio for Bitcoin currently stands at 80%, indicating that a significant majority of BTC holders are sitting on profits. If Bitcoin manages to close decisively above the $109,300-$112,000 resistance band, it could open the door for a new leg into price discovery. However, a breakout above $112,000 may require stronger conviction or a catalyst.
[1] Source: Coin Metrics, TradingView, Federal Reserve Economic Data (FRED) [2] Source: Coin Metrics, TradingView, Elliott Wave International [3] Source: Coin Metrics, TradingView, Bloomberg [4] Source: Coin Metrics, TradingView, Bloomberg, CoinShares, Coinbase Asset Management, Grayscale Investments
Investors could view the potential Bitcoin breakout as an opportunity for investing, given its increasing correlation with the growth of the global M2 money supply. As more liquidity enters the financial markets, Bitcoin, as an alternative asset, might attract investors seeking to hedge against inflation and economic uncertainty.
Furthermore, strategic investors may consider Bitcoin as a lucrative investment choice considering the ongoing bullish technical patterns, such as the cup and handle pattern and wave five of a bullish Elliott structure, which suggest a substantial upward price movement.
