Every four years, crypto enthusiasts treat the Bitcoin halving like New Year’s Eve. Countdown clocks pop out everywhere, bold price targets are set and fireworks in price movements promised. The April 2024 Bitcoin halving cut block rewards from 6.25 Bitcoin to 3.125 Bitcoin, and as always people expected fireworks. However, in 2025, serious capital is no longer surprised by this halving event, it’s on every institution’s slide deck already!

Instead of the straight-line blastoff that usually follows a halving event, post-2024 Bitcoin  has chopped around the $100K region. Of course there have been big swings driven by macro data, ETF flows and investor position but prices have been coming back to the $100K region. The halving is the backdrop, not the full script of the Bitcoin story. Let’s dig in and try to understand Bitcoin’s next major move!

The 4 metrics that actually matter

Hash rate and difficulty

Hash rate acts as the total computing horsepower that protects the Bitcoin network and it is measured in exahashes per second (EH/s). The higher the hashrate, the more expensive it becomes to attack Bitcoin. Now, Difficulty on the other hand is the auto-tuning mechanism that adjusts roughly every 2 weeks so blocks still arrive about every 10 minutes, no matter how many machines are plugged in.

In June 2025, Bitcoin’s mining difficulty hit a record approximately 126.98 trillion on the back of a 14-day average hash rate near 913 EH/s, some of the highest ever. And just weeks later, hash rate dropped roughly 30% to under 700 EH/s, setting up the biggest difficulty drops which was -9% since the China mining ban in 2021 as high summer power costs forced miners offline.

A sustained, rising in hash rate after a halving often signals that miners are still investing in hardware and cheap energy which is often a vote of confidence in future profitability. Sharp drops and large negative difficulty adjustments  however, point to stress among weaker miners. 

Miner profitability

Hash rate tells you how much mining is happening while hash price will tell you if it's worth the effort. In other words, Hashprice is just miner revenue per unit of hash power per day. It bundles together Bitcoin’s price, block rewards, transaction fees and difficulty.

By mid-June 2025, mining difficulty was at record highs and fees contributed less than 1% block rewards. At that time hash price sank to about $52 per PH/s. Analysts estimated that all in production costs climbed to $70000 per Bitcoin up from roughly $64000 earlier in the year. However, a modest 6.7% drop in hash rate plus a small price rebound later nudged miner profitability up about 5.3% in June. This underscored how sensitive the industry is to even small or tiny changes.

When hashprice is scrapping record lows but the hash rate remains elevated, marginal miners are forced to sell their Bitcoin or shut down. This is a classic late bear or early bottom behaviour. As profitability recovers and difficulty stabilizes, forced selling behaviour eases and this removes a constant source of sell pressure from the market. In other words, extreme miner pain or relief often leads to higher prices far more than the halving date itself.

Illiquid supplies

Illiquid supplies refers to the Bitcoin that sits in wallets which almost never sell, these are usually long term holders, cold storage, corporate treasuries and ETFs. The higher these wallets’ share of Bitcoin, the less the Bitcoin that is practically available on exchanges when new demands show up.

By June 26 in 2025, illiquid supply had gone up to 14.37 million Bitcoin. And additionally, there was 19.8 million Bitcoin mined in total while over 72% of the circulating supply was locked up. This only left 5.4 million Bitcoin classified as liquid. Fidelity highlighted that the cohort of coins held for more than 10 years is now expanding faster than new issuance. This is because 550 Bitcoin joins this cohort per day versus 450 bitcoin mined daily. About 17% of the total supply is already in this ultra-sticky category and projections toward 30% by 2026.

The rising illiquid share and the rising price is the textbook early to mid-bull behaviour. This means that fresh buyers must compete for an over shrinking tradable float. The main key is to watch when this trend stalls or reverses. When long term holders as a group start spending more than they accumulate, it often lines up with late cycle distribution rather than early accumulation.

On-chain activity and realized price

While spot price tells you the price at which Bitcoin trades for now, realized price is more like the network’s average cost basis. Realized price values each coin at the price it last moved on-chain. Analysts typically split this realized price into short term holder realized price for those coins moved in the last 155 days, and long term holder realized price for older coins.

On August 6, 2025, all three major price lines were trending higher with short term holder realized prize at $106K, overall realized prize at $51348 and long term holder realized price around $36500. Rising realized prices mean that new buyers are consistently stepping in at higher levels and so far, surviving volatility.

Historically, when spot Bitcoin stays above the short term holder realized price, the bull phase tends to continue and persistent breaks below this price signal that euphoria has run its course. It’s not just on-chain nerds watching these movements, an October Investopedia piece noted that firms like Fidelity and Ark now explicitly cite on-chain metrics, institutional flows and macro data together in their cycle outlooks.

A simple mental model for the next cycle

The next cycle will most likely be divided into 3 different phases.

The first phase will be the early bull phase which will be characterized by hash rate and difficulty grinding higher. Hash price will also be recovering from painful lows while illiquid supplies rise as ETFs and long term holders accumulate. Additionally, realized prices will trend up with spot only modestly above short term holder realized price.

The second phase will follow the first and will be characterized by very high hash rate, rich miner margins and the slowing of growth of illiquid supplies as old hands distribute. On-chain profit metrics will also become extreme while spot will trade far above realized prices.

The last phase will be a bear or reset as always. In this phase difficulty and hash rate will wobble as inefficient miners capitulate and hashprice will revisit stress levels. The illiquid share of Bitcoin will quietly increase again as strong hands reload and realized prices will drift towards or above spot prices as the market digests late cycle buyers.

Final thoughts and conclusion

The halving may start the clock for price movement but the days of it deciding the direction of the story seem to be over. Miners, holders and on-chain flows have now replaced halving as the trajectory deciders. Watching these 4 metrics will not make Bitcoin simple but it will make the next cycle a lot less mysterious. And by the way, this is not financial advice, just the ramblings of a crypto enthusiast.

References

CoinDesk – “Bitcoin Mining Costs Soar as Hashrate Hits Records: TheMinerMag” (June 16, 2025) https://www.coindesk.com/markets/2025/06/16/bitcoin-mining-costs-soar-as-hashrate-hits-records-theminermag
CoinDesk – “Bitcoin Illiquid Supply Climbs to Over 14M BTC, Reflects Strong HODL Trend” (June 26, 2025) https://www.coindesk.com/markets/2025/06/26/bitcoin-illiquid-supply-climbs-to-over-14m-btc-reflects-strong-hodl-trend
Cointelegraph – “Bitcoin supply squeeze intensifies as ‘ancient’ holders eclipse newly mined BTC” (June 18, 2025) https://cointelegraph.com/news/bitcoin-supply-squeeze-intensifies-as-holders-surpass-daily-mined-btc
CoinDesk – “Bitcoin Realized Prices Climb as Investors Continue Accumulating” (August 6, 2025) https://www.coindesk.com/markets/2025/08/06/bitcoin-realized-prices-climb-as-investors-continue-accumulating
Investopedia – “Bitcoin is Sinking Back Toward $100,000. Where Does it Go From Here?” (October 17, 2025) https://www.investopedia.com/bitcoin-is-sinking-back-toward-usd100-000-where-does-it-go-from-here-price-crypto-11831940