Sustainable Bitcoin Rally Indicated by Realized P&L Ratio; Reversal Danger Persists at Minimal Levels
Bitcoin Remains Bullish Despite Short-Term Corrections
In the ever-evolving world of cryptocurrency, Bitcoin continues to dominate the headlines. After a decisive rally since early August, the digital asset has approached its all-time high at $123,217.39, with analysts divided on its future direction.
Market Structure and Price Levels
The market structure of Bitcoin shows a resumed uptrend, with healthy medium-to-long-term bullish momentum. A Break of Structure (BoS) early in 2025 confirmed this bullish momentum, pushing prices near $125,000. However, strong selling pressure at that level caused a recent correction and consolidation around $113,800.
Despite short-term indicators showing fatigue, medium/long-term SMAs remain bullish, indicating solid underlying strength. Bitcoin is currently trading just below its all-time high of $123,000, with key moving averages - the 50 SMA ($116,605), 100 SMA ($117,340), and 200 SMA ($112,019) - providing support.
Realized Profit and Loss (P&L) Ratio and Market Sentiment
Although specific Realized P&L Ratio data is not available, the market shows signs of short-term bearish pressure. The Fear & Greed Index, a popular sentiment indicator, stands at 44 ("Fear"), and about 38% bullish sentiment by technical indicators were observed on August 21, 2025. This suggests that some investors are taking profits amid the recent post-ATH correction.
Price Predictions Based on Models and Monetary Adoption
Updated Total Addressable Market (TAM) models project Bitcoin prices reaching from $131,000 up to potentially $169,000 by the end of 2025, assuming continued incremental adoption of Bitcoin as a monetary asset. These models incorporate macroeconomic shifts, investor behavior, regulatory developments, and supply curves updated with data through mid-2025.
Regulatory and Institutional Factors
Crypto ETFs in the U.S. have seen significant inflows ($29.4 billion year-to-date) supported by a favorable regulatory environment. This institutional demand enhances Bitcoin's market foundation and could positively influence its trajectory beyond purely technical factors.
Looking Ahead
The recent move marks the second approach toward this level in the past three months, highlighting its importance as a critical breakout point. A confirmed breakout above $123K would likely trigger a new wave of buying, pushing BTC into price discovery and setting fresh record highs.
However, the failure to break above the $123K level could lead to renewed selling pressure, with potential retracements toward the 100 SMA or even the 200 SMA if momentum fades. The P&L Ratio remains closer to its average range, indicating a more balanced market environment despite Bitcoin trading just below its $123,000 all-time high.
In past cycles, this metric often spiked to overheated levels before major pullbacks, signaling that market participants were taking excessive profits all at once. However, top analyst Axel Adler asserts that Bitcoin's current market structure presents a much lower risk of a sharp trend reversal compared to previous peaks in the Realized Profit and Loss (P&L) Ratio.
In summary, Bitcoin's market structure indicates a resumed uptrend with healthy medium-to-long-term bullish momentum despite short-term corrections. Realized P&L dynamics likely reflect profit-taking and market consolidation phases, which are commonly followed by renewed price appreciation if support holds. Combined with strong institutional inflows and increasing monetary adoption modeled in TAM studies, Bitcoin's future price trajectory points to potentially higher valuations towards and beyond late 2025, though short-term volatility and risk of corrections remain.
- Altcoins, like Ethereum and other coins, are also experiencing trading activity, following Bitcoin's lead, as the cryptocurrency market shows a resumed uptrend.
- Volatility continues to characterize the crypto market, with Bitcoin currently trading just below its all-time high, making it an attractive opportunity for investing and Defi applications.
- Financial analysts are monitoring Bitcoin closely as it approaches the $123,000 mark, looking for signs of a confirmed breakout that could lead to fresh record highs, possibly affecting the valuation and investment strategies in the crypto market.
- Despite the recent corrections, key moving averages like the 50 SMA, 100 SMA, and 200 SMA provide support, indicating that Bitcoin could bounce back from short-term selling pressure and retain its bullish market structure over the medium and long term.
- As institutional investors continue to demonstrate interest in cryptocurrencies through Crypto ETFs, the potential influx of finance from these channels could contribute to Bitcoin's market foundation, providing a cushion against volatility and supporting higher valuations towards and beyond late 2025.
