Bitcoin Rebounds to $65,500, but On-Chain Data Reveals Ongoing Market Weakness
Bitcoin Price saw a technical rebound from the $62,500 area on February 25, following a brief wave of selling pressure. According to Gate market data, as of February 25, 2026, the price of Bitcoin (BTC) stands at $65,481.8, up 3.94% in the past 24 hours, successfully reclaiming the $65,000 threshold. While the price shows signs of recovery, a deeper analysis of on-chain data reveals persistent structural weakness in the market, which may limit the potential for further rebounds.
On-Chain Metrics Reveal Underlying Market Structure
Despite Bitcoin’s positive intraday movement, several core on-chain indicators have not turned bullish. Instead, they suggest the market may be entering a prolonged defensive phase.
First, the realized profit and loss ratio, which measures overall market profitability, has issued a historic signal. The 90-day simple moving average (90D-SMA) of this metric has fallen below 1, indicating that the market is currently realizing excess losses—investors are selling at a loss greater than their profits. Historically, once this indicator drops below 1, it often takes the market up to six months or longer to recover. Only when the metric climbs back above 1 does liquidity typically return to the crypto market in a meaningful way.
Bitcoin realized profit and loss ratio. Source: Glassnode
Meanwhile, Bitcoin’s realized market cap has seen significant contraction. Realized market cap is calculated based on the price at which each coin last moved on-chain, reflecting the total capital flowing into the network. Data shows this metric has dropped from a peak of $1.12 trillion in November 2025 to about $1.09 trillion currently, meaning roughly $33 billion in network capital has exited in less than three months. The ongoing decline in realized market cap further underscores the lack of new capital entering the market.
Changes in Holding Structure and Defensive Market Stance
Examining the micro-level holding structure, participant behavior also confirms a defensive posture. On-chain data shows that addresses holding between 1,000 and 10,000 BTC have been reducing their positions over the past 12 days. Their share of total supply fell from 21.7% to 21.2%, representing a reduction of nearly 90,000 BTC—approximately $5.8 billion at current prices. Although the pace of selling has been relatively steady, this redistribution led by large holders creates persistent selling pressure during rebounds, limiting upside potential.
Bitcoin supply distribution. Source: Glassnode
Additionally, HODL Waves data shows that the supply of coins held for 3 to 6 months has risen to 25.9%, now the largest holding group in the market. Most of these coins were acquired near the market peak at the end of 2025 and are currently underwater. This structure means these holders are forced to become long-term investors, while the market lacks fresh capital to absorb supply from above. Analysts broadly agree that, with trapped holders locked in and insufficient new inflows, the market is likely to remain in a defensive mode.
Technical Levels and Market Sentiment
From a price action perspective, Bitcoin rebounded quickly after dipping to the $62,525 support level, indicating short-term buying interest in that area. However, the daily technical pattern remains under pressure. The previous breakdown from a triangle formation signaled potential downward adjustment.
Currently, market sentiment is delicately balanced. Despite the rebound, derivatives metrics such as funding rates remain skewed toward the bears, showing participants are cautious about the sustainability of the rally. In the short term, if macro headwinds persist, Bitcoin may retest the $62,500 support zone. If this level fails, the next psychological threshold will move down to $60,000. Conversely, if buyers step in and push the price above resistance near $67,394, the short-term weakness could be temporarily reversed.
Bitcoin price analysis. Data source: TradingView
| Core Metric | Performance (as of 2026-02-25) | Data Source |
|---|---|---|
| Spot Price | $65,481.8 (24h +3.94%) | Gate Market Data |
| 24h Trading Volume | $1.27 billion | Gate Market Data |
| Market Cap | $1.31 trillion | Gate Market Data |
| Key Support Levels | $62,500 / $60,000 | On-Chain Analysis |
| Key Resistance Level | $67,394 | Technical Analysis |
| Realized P&L Ratio | < 1 (Losses dominate) | Glassnode |
| Large Holder Position Change | 21.2% of supply (90,000 BTC reduced in past 12 days) | Glassnode |
Overall, there is a clear divergence between Bitcoin’s current price rebound and its on-chain fundamentals. Until the realized profit and loss ratio recovers, capital flows return, and large holder selling slows, the foundation for a sustained market recovery remains weak.
Conclusion
Although Bitcoin has bounced from the $62,500 support zone to above $65,500, showing short-term improvement, on-chain data indicates that structural weakness persists. The realized profit and loss ratio falling below 1 signals a market dominated by losses, and historical patterns suggest this is often accompanied by months of low liquidity. Large holders continue to reduce positions, with nearly 90,000 BTC sold in the past 12 days, adding to selling pressure during rebounds. Until net capital inflows resume and on-chain metrics recover, the overall foundation for market recovery remains fragile, and the outlook is likely to stay volatile or defensive.
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