Key Points:
- Profit‑Taking Surge to Multi‑Month Highs: On‑chain realized profits have climbed to an average of $1 billion per day as BTC/USD nears $98,000.
- Institutional Inflows Remain Strong: Despite profit‑taking, spot Bitcoin ETFs continue to attract hundreds of millions daily, led by BlackRock’s iShares Bitcoin Trust (IBIT) with $351 million on May 1, 2025.
- Historical Precedent for Late‑Stage Behavior: Similar patterns in late 2024 preceded both new highs above $100K and sharp corrections, marking a classic end‑of‑cycle scenario.
- Investor Psychology Unchanged by ETFs: Although spot ETFs have reshaped market structure, on‑chain investor behavior remains governed by the same profit‑taking psychology seen in previous bull cycles.
- Three Possible Near‑Term Paths: Experts outline scenarios ranging from a continued surge to $175K, consolidation in the $90K–$110K range, or a deeper correction to $70K–$85K.
1. Profit‑Taking to Multi‑Month Highs
The most striking development in early May 2025 is the dramatic increase in realized profits on the Bitcoin network. CryptoQuant’s on‑chain data shows that Bitcoin holders have been locking in gains at an average pace of $1 billion per day, a level not seen since the peak of late 2024. As BTC/USD flirted with $98,000, the 7‑day moving average of net realized profit/loss for all holders surged to its highest point in months.
Historically, such elevated profit‑taking is emblematic of a late‑stage bull market. Contributor Kripto Mevsimi notes that while the intensity may not match the November–December 2024 frenzy, it nonetheless aligns with behavior seen as Bitcoin approaches local tops—when holders, even at higher prices, rush to lock in gains.
2. Institutional Flows: The Flip Side
Contrary to a pure sell‑off narrative, institutional vehicles—namely spot Bitcoin ETFs—continue to draw substantial capital. On May 1, 2025, U.S. spot ETFs combined for $422 million in net inflows, led by BlackRock’s IBIT with $351 million of that total.
Even as some funds like Grayscale’s Bitcoin ETF saw a one‑day pause (zero inflow on May 7, per Farside Investors), the broader trend remains firmly positive. Over the past two weeks, spot ETFs have amassed over $4.2 billion in net new assets, underscoring continued institutional conviction.
Glassnode and Coinbase Institutional further report that Q2 2025 is shaping up as a quarter of record ETF flows, stablecoin growth, and renewed DeFi activity—an institutional pivot that did not exist in previous cycles.
3. Late‑Stage Bull Market: Historical Parallels
To understand why $1 billion a day in on‑chain profits matters, we look back to late 2024. At that time, Bitcoin broke past its old all‑time high and cracked $100,000 for the first time. Profit‑taking then reached extremes similar to today’s, and was quickly followed by a sharp pullback of over 20 percent in a matter of weeks.
Analysts point out that Bitcoin’s Net Unrealized Profit/Loss (NUPL) ratio—another sentiment indicator—entered a divergence in November 2024, signaling that despite new highs, underlying network activity was cooling, a classic top‑formation sign. Similar warnings are flashing in 2025: realized profits are sky‑high, but momentum metrics are showing subtle weakening.
4. Investor Psychology: Constant Through Change
One might assume that the advent of U.S. spot ETFs—approved in January 2024—would fundamentally alter investor behavior. Yet, on‑chain data tells a different story. Kripto Mevsimi stresses that although market infrastructure has evolved, “investor psychology has not changed”: profit‑taking spikes still coincide with new price peaks, regardless of vehicle.
Even major institutional buy‑and‑hold players like BlackRock, Fidelity, and Vanguard haven’t eliminated the natural urge to secure gains. Over 60 percent of daily traded Bitcoin still moves from ‘unrealized gain’ addresses to ‘realized gain’ addresses once prices crest.
5. Three Near‑Term Scenarios
Given these dynamics, market analysts have outlined three plausible paths for Bitcoin’s next month or two:
- “Melt-Up” to $175K+: Continued ETF demand and halving narratives push BTC through $100K resistance, leading to a parabolic surge toward $150K–$175K.
- $90K–$110K Consolidation: Profit‑taking and macro uncertainty force Bitcoin into a wide trading range, shaking out weak hands before the next leg up.
- Correction to $70K–$85K: If realized profits remain at current highs and ETF inflows wane, Bitcoin could retrace sharply, testing key supports near $70K.
Each scenario carries distinct risk‑reward implications. A melt‑up precludes opportunity for dips but carries blow‑off top risk; consolidation offers fresh entry points; and a correction could redefine the next multi‑year accumulation phase.
6. Recent Macro and Regulatory Catalysts
Beyond on‑chain metrics, several external factors could tilt the scales:
- U.S. China Trade Talks: Optimism around trade negotiations has historically buoyed risk assets, including Bitcoin.
- Stablecoin Legislation (GENIUS Act): Proposed U.S. stablecoin rules may clarify regulatory uncertainty, indirectly supporting broader crypto flows.
- State Bitcoin Reserves: New Hampshire and Arizona bills to establish state‑level Bitcoin treasuries mark growing mainstream acceptance.
- Federal Reserve Policy: A Fed pause or dovish tilt could reinforce risk‑on sentiment; hawkish surprises may tighten liquidity and pressure BTC.
Taken together, these developments create a “cross‑winds” environment: bullish tailwinds from institutional adoption and halving narratives, countered by potential headwinds from profit‑taking and macro tightening.
Conclusion
Bitcoin’s recent $1 billion‑a‑day realized profits highlight a market at a crossroads. On one hand, robust institutional inflows via spot ETFs have cemented Bitcoin’s role as a mainstream portfolio asset. On the other, an on‑chain profit‑taking frenzy echoes behaviors seen at late bull‑market peaks, warning of heightened risk.
Looking ahead, investors must weigh three key scenarios—melt‑up, consolidation, or correction—while monitoring the interplay of ETF demand, realized profit levels, and macro/regulatory catalysts. Regardless of the path, one truth remains: Bitcoin’s fundamental investor psychology, driven by fear and greed, continues to govern market dynamics, just as it did in cycles past. Whether you are hunting for the next yield opportunity or seeking blockchain’s practical utility, understanding these on‑chain and institutional signals is essential to navigating the path forward.
