Bitcoin (BTC) Could Be Approaching a Period of Market Consolidation: Key Indicators Explained

As of April 2025, Bitcoin (BTC) is showing signs of potential consolidation after recent volatility. Several technical and on-chain metrics suggest the cryptocurrency may enter a wait-and-see phase, where traders adopt a more cautious approach. The Relative Strength Index (RSI) is hovering near neutral levels, while the 200-day moving average continues to act as strong support. Meanwhile, exchange reserves remain stable, indicating neither significant accumulation nor distribution at current price levels. This comes as institutional investors appear to be taking a breather following the last quarterly futures expiry. Market analysts are watching for a clear breakout above the $75,000 resistance level or breakdown below $60,000 support to determine the next major trend. The current sideways action could persist until either macroeconomic catalysts or substantial changes in network fundamentals emerge.

Bitcoin Growth Softens

Glassnode’s latest analysis reveals that Bitcoin’s realized cap has surged to a record high of $872 billion, despite a modest monthly growth of around 0.9%. This signals continued capital inflows but reflects a cooling investor appetite, indicative of a risk-off sentiment prevailing in the market.

The blockchain intelligence firm explained that in a difficult market environment, steady inflows into Bitcoin are impressive. Despite this, the declining rate of new capital suggests investors are hesitant to commit more funds right now and signals that cautious, risk-averse behavior will likely dominate in the near future.

Additionally, the Realized Profit and Loss, adjusted for volatility, shows an almost equal distribution, which points to saturation in investor activity. Interestingly, this pattern often precedes a consolidation phase. The market appears to be seeking a new equilibrium.

Furthermore, Bitcoin’s volatility-adjusted Net Realized Profit/Loss has returned to its long-term median, a level historically associated with transitions between bull and bear markets. This places Bitcoin at a crucial moment, with market direction hanging in the balance.

Volatility Strikes Bitcoin Again

While Bitcoin has shown impressive resilience, Glassnode stated that the cryptocurrency has not escaped the intense volatility rippling through global markets as it suffered its largest decline of the 2023-2025 cycle.

This correction has hit newer investors hardest, as they now account for the bulk of unrealized losses. But long-term holders appear largely unaffected by current economic pressures.

“From an individual investor perspective, the market has endured far more severe drawdowns in prior cycles, notably during the May 2021 and 2022 bear markets. In addition, mature and tenured investors remain unfazed by the ongoing economic stress, and reside in a position of near unilateral profitability.”