On-chain analytics firm Glassnode has revealed in a report how long-term Bitcoin liquidity has witnessed a sharp decline alongside the market decline.
The liquidity ratio of long-term Bitcoin holders has recently fallen
In the latest weekly report Glass junction has talked about how liquidity in the Bitcoin market has changed after the recent recession. Glassnode measured “liquidity” using the Realized Profit/Loss Ratio, an on-chain metric that measures the ratio between the profit and loss that BTC investors realize through their trades.
Current demand momentum can be tracked using a version of this indicator that specifically tracks the profitability of short-term holders (STHs), investors who purchased their coins within the last 155 days.
As the chart below shows, the STH Realized Profit/Loss ratio was previously at a relatively high level, but since early October its value has plummeted.
At just 0.07, the indicator is now deep in loss territory, a sign that recent Bitcoin buyers have overwhelmingly capitulated at a loss. “Such overwhelming loss dominance confirms that liquidity has evaporated, especially after heavy demand absorption in the second and third quarters of 2025, as long-term holders increased spending,” the analytics firm explains.
The indicator fell to a similar low in the first quarter of 2022, but so far the market weakness has not lasted that long. The report noted that if the ratio remains low, market conditions could mirror those at the time.
While short-term demand momentum has collapsed, long-term liquidity has not, at least not yet. Long-term momentum can be measured by the realized profit/loss ratio of the long-term holders (LTHs), which represent the more resolute part of the market (holding time greater than 155 days).
From the above chart, it is visible that the 7-day exponential moving average (EMA) of the Bitcoin LTH realized gain/loss ratio witnessed a sharp decline when BTC crashed.
However, despite the decline, the value of the metric is still 408, implying that on average LTHs realize a profit of 408 times the loss. This means that long-term liquidity is still healthy compared to the first quarter of 2022, or even the major bottom formations from the current cycle.
However, Glassnode warned: “If liquidity continues to decline and this ratio falls toward 10x or lower, the potential for a transition into a deeper bear market becomes difficult to ignore.”
It now remains to be seen how the LTH realized gain/loss for Bitcoin will change in the near future, and whether liquidity will come under further pressure.
BTC price
At the time of writing, Bitcoin is trading around $90,600, down 1.3% in the past week.