Bitcoin [BTC] continues to show signs of bullish strength, but subtle cracks in its on-chain fundamentals are beginning to raise caution flags. After rebounding off its 365-day Simple Moving Average (SMA) on the MVRV Ratio—a widely followed mid-cycle indicator—BTC has managed to hold above $108,000, signaling sustained confidence among investors. The metric’s bounce, which occurred nearly two weeks ago, suggests that the current uptrend remains intact for now. Historically, when BTC trades above its MVRV 365-day SMA, it points to strong conviction in the asset’s long-term potential.

Still, bullish sentiment cannot exist in a vacuum. While Bitcoin’s price structure remains technically sound, on-chain activity is showing signs of fatigue. For the rally to continue meaningfully, the network needs not only price stability but also renewed user engagement and transaction volume.

One of the key metrics offering a glimpse into market behavior is the Net Realized Profit/Loss (NRPL). This indicator rose by 2.27% recently, totaling $293 million in net realized gains. While this reflects a round of moderate profit-taking, it’s far from the kind of aggressive distribution that often leads to sharp corrections. In fact, such modest realization of gains is typical during mid-cycle phases, when traders lock in profits without abandoning the broader trend. The absence of large-scale selling suggests that market participants still expect higher prices in the near future.

However, there are emerging signs of potential weakness. Data from Santiment shows that Bitcoin’s transaction count has dropped to 85.9K, while network growth has dipped to 65.8K. Both metrics are near monthly lows and indicate a decline in on-chain activity. A shrinking number of transactions and new addresses typically signals cooling investor interest. For some, this could be interpreted as a temporary consolidation phase—a necessary “reset” before the next leg up. But if low activity persists, it could eventually undermine bullish momentum.

At the same time, sentiment around Bitcoin is heating up. Social Dominance for BTC surged to 34.92%, its highest level in 2025 so far. This sharp rise in social chatter may reflect growing attention and enthusiasm—but it also carries a potential downside. Historically, spikes in social dominance that aren’t backed by solid on-chain growth have coincided with local tops. Increased speculation often leads to volatile swings, especially when the crowd gets ahead of fundamentals.

From a technical perspective, Bitcoin’s structure still leans bullish. At the time of writing, BTC is trading above both the 9-day and 21-day Exponential Moving Averages (EMAs), with the Relative Strength Index (RSI) hovering around 55. This positioning indicates mild upward momentum and dynamic support beneath the price. If bulls can push BTC above the $110K mark, and RSI rises above 60, it could trigger a fresh wave of buying and renewed upward pressure.

But there’s also the chance that BTC remains range-bound in the short term. Without a decisive break or a significant pickup in trading volume, sideways movement may dominate. The EMAs are currently acting as reliable support, giving bulls a chance to regroup and attempt another breakout—if sentiment and participation align.

In essence, Bitcoin remains in a cautiously bullish state. The MVRV rebound, healthy price structure, and moderate profit-taking all support a continuation of the trend. Yet the decline in network activity and the surge in social buzz suggest a fragility that shouldn’t be ignored. If user engagement fails to rebound, it could eventually drag on price performance.

For now, BTC holders can take comfort in the fact that the market hasn’t shown signs of panic or mass exit. But it’s clear that momentum is beginning to thin out. Traders should remain patient and watch for a return of volume and activity before expecting a significant breakout. Bitcoin’s bulls may still be in control—but they’re walking a tighter rope than it seems.