Bitcoin’s recent trading behavior has been a focal point of discussion among investors, particularly as it currently sits around $111,700. This price marks a significant 16% decline from its recent highs, raising questions about market stability. However, findings from ARK Invest’s Q3 2025 report reveal that the underlying fundamentals of Bitcoin remain robust, driven by deep institutional engagement and favorable macroeconomic conditions.
According to ARK Invest, Bitcoin closed the third quarter of 2025 at $114,065, comfortably above its short-term holder cost basis of $111,933, a critical bullish indicator. During the last quarter, on-chain fundamentals depicted a strengthening network: mining difficulty surged by 21.7% quarter-on-quarter and 61% year-on-year, achieving a record 611 EH/s, a clear sign of enhanced network security.
Notably, miner revenue also saw a 6.3% increase to $52.4 million daily, an impressive 82% year-over-year growth, indicating a resurgence in profitability following Bitcoin’s recent halving event. The transaction volume increased significantly, up 27.8% from the previous quarter, reaching an average of 103,600 BTC per day. Active entities also grew, up 6.1% year-over-year, demonstrating consistent demand and engagement within the ecosystem.
ARK’s analysis suggests that the illiquid supply of Bitcoin, defined as coins unlikely to be sold, reached 14.3 million BTC—signifying a rising conviction among long-term holders. Despite the recent pullback in prices, 94.5% of the circulating supply remains in profit, showcasing a robust on-chain structure typically observed only during mid-cycle consolidation phases.
Moreover, the report underscores increasing institutional activity in the Bitcoin space, with public companies enhancing their digital-asset treasuries by 40% in 2025, now holding 1.1 million BTC, or 5.6% of the total supply. U.S. spot Bitcoin ETFs also reached a record high, controlling 1.3 million BTC, or 6.6% of total supply. Historically, peaks in ETF balances have often been precursors to new price highs.
In terms of the derivatives market, current data indicates a healthy environment, as perpetual funding rates stand at approximately 2.1%, and the three-month futures basis hovers around 7.6%. These figures are significantly lower than the extremes seen during the market’s 2021 peak, suggesting that leverage remains manageable and speculative activities are restrained.
From a macroeconomic perspective, ARK anticipates that declining inflation rates and weakening labor conditions may push the Federal Reserve toward adopting a more dovish stance. Recent trends show the U.S. labor differential turning negative for the first time since 2020, while the quits rate has dropped to 1.9%. Additionally, average unemployment duration has risen to 24.5 weeks, reflecting a softer labor market.
Despite these challenges, price pressures appear subdued. With Truflation’s CPI indicating a sub-3% year-on-year trend, ARK believes that the Fed’s focus will shift from inflation combat to employment issues, potentially leading to more favorable financial conditions for Bitcoin.
The current market for Bitcoin can be characterized as range-bound, but appears stable within the $108,000-$110,000 zone—aligning with key moving averages. The Relative Strength Index (RSI) indicates mild oversold conditions, while the MACD histogram reveals dwindling bearish momentum.
If Bitcoin surges above $117,000, analysts predict a short-term rally targeting $124,000-$126,000. Conversely, if the price falls below $108,000, it may test support levels around $103,000 and $98,200, aligning with retracement targets from previous movements.
As the market evolves, ARK’s insights suggest that although Bitcoin may face volatility in the short term, the long-term outlook remains bullish, propelled by institutional accumulation, tightening supply, and improving macro conditions moving into 2025.
In a related development, Bitcoin Hyper ($HYPER) is emerging as a groundbreaking project, designed to be the first Bitcoin-native Layer 2 solution utilizing the Solana Virtual Machine. By harnessing Bitcoin’s robust security along with Solana’s high-speed capabilities, this initiative aims to facilitate faster smart contracts and decentralized applications. With the presale already exceeding $23 million, interest in HYPER tokens is escalating, and the prospects for this integration of technologies are promising.
