Is Bitcoin’s position at risk? Look out for THESE key signals!

• Bitcoin’s Large Holders Netflow fell by 191%, marking a shift in whale behavior and weakening demand support
• Realized Profits dropped below $1 billion, mirroring late-October 2024 levels

Bitcoin’s [BTC] market has remained in a delicate balance lately. In fact, it seemed to be supported by low realized profits and fading demand signals that raise the odds of a directional shift soon. 

At the time of writing, BTC was priced around $106,000, with its Realized Profits (7DMA) hovering just below the $1 billion threshold – Levels not seen since late October 2024.

Source: CryptoQuant

Despite a recent local high, however, profit-taking has remained subdued – Consistent with the low Realized Profits trend.

And yet, the backdrop tells a different story – One of declining demand and mounting fragility.

Are whales backing out? AMBCrypto’s analysis breaks it down…

The Large Holders Netflow metric highlighted a concerning shift though. 

Over the last seven days alone, netflows fell by a staggering 191.44% – A sign that whales dramatically reduced their accumulation patterns. 

Throughout April and May, netflows were relatively neutral. However, June has seen a consistent drop so far. This suggested that some large holders may be stepping back or distributing cautiously. 

Without their steady inflows, Bitcoin will become more exposed to downside risk. Particularly if other demand sources continue to weaken in tandem.

Source: IntoTheBlock

What do negative Funding Rates reveal?

Well, the picture from the derivatives markets front hasn’t been reassuring either. In fact, persistently negative Funding Rates on dYdX revealed that traders may be leaning bearish and betting against a sustained rally.

Every attempt by longs to regain ground has fizzled out quickly. Even brief flips into positive territory failed to hold.

Unless Funding Rates stabilize or flip positive for longer periods, buyers will likely struggle to regain any control. This would leave Bitcoin vulnerable to speculative sell-offs.

Source: Santiment

Has Bitcoin’s Unrealized Profits cushion thinned?

The MVRV Z-score fell to 2.47 from a local peak of 2.97 earlier in June. This drop could hint at thinning unrealized profits following a sharp May rally.

Without hefty unrealized profits to fall back on, holders, and especially short-term ones, might have less incentive to stay put.

At the same time, LTHs have been continuing to resist exit triggers, creating a gridlock with no clear direction.

Source: Santiment

Are on-chain valuation signals overstretched?

Finally, some of Bitcoin’s on-chain valuation models might be flashing red right now. 

Metrics such as the NVT and NVM ratios surged, rising by 37.78% and 27.45% respectively. These spikes alluded to a growing disconnect between market cap and network utility. 

In past cycles, such divergences have preceded either sharp corrections or prolonged sideways movement. With the NVT at 45.83 and the NVM at 3.05, BTC might seem overvalued relative to its on-chain activity. 

It’s a warning – Crowd sentiment may drive the price more than organic growth.

Source: CryptoQuant

Also, the Stock-to-Flow (S2F) ratio dropped by 16.66% to 1.060M, indicating a decrease in perceived scarcity. This metric traditionally supports bullish narratives around post-halving supply shocks. 

However, the recent decline suggested that either Bitcoin issuance has risen or investor accumulation has slowed down. In either case, the weakening of this scarcity signal could undermine long-term bullish expectations. 

Can weakening demand support Bitcoin’s position?

Despite fragility across multiple metrics, Bitcoin has so far managed to hold its neutral ground. However, falling whale activity, bearish funding rates, and rising valuation metrics are signs of a fragile state. 

If demand continues to deteriorate, this balance is more likely to break – Potentially triggering a move away from the current consolidation phase.