Bitcoin has once again tested investor confidence with its relatively stable price, trading around $111,700 yesterday after a sharp 16% correction from its highest levels recorded recently. However, according to ARK Invest’s Quarterly Bitcoin Report for Q3 2025, market fundamentals remain strong, with rising fundamentals, strong institutional participation, and macroeconomic developments that could pave the way for a resurgence through the end of the year.
Bitcoin Fundamentals Remain Strong Despite Volatility
ARK Invest notes that Bitcoin ended the third quarter of 2025 at $114,065, with its price surpassing its short-term holding cost of $111,933, a crucial historical starting point.
Thus, the technical foundations of blockchain remain structurally sound due to the increase in:
- Mining difficulty By 21.7% in the third quarter, and by 61% on an annual basis, to reach 611 exa hashes/second, indicating that blockchain security has reached an all-time high.
- Income of minors by 6.3% during the same quarter, to reach $52.4 million per day, an increase of 82% year-on-year, which confirms the improvement in profitability since the Bitcoin halving.
- Transaction sizes By 27.8% on a quarterly basis, to an average of 103,600 Bitcoins per day, with activity of entities (users or addresses) increasing by 6.1% on an annual basis, indicating continued demand and usage.
- Non-trade supply (Unlikely to be transferred or exchanged) 14.3 million Bitcoins, an increase of 4.6% year-on-year, indicating growing confidence among currency owners in the viability of their investment over the long term.
Even after the recent decline, 94.5% of the supply is still in profit, indicating that the majority of digital currency owners have not suffered losses, which is a positive situation that is rarely found outside of phases of relative price stability in the middle of an asset’s upcycle.
Ark Invest also points out something no less important, which is that Bitcoin’s “supply density” is close to 30%, the highest percentage since 2020, meaning that a significant percentage of the balances last moved within a range of 15% of the current price, and these rally ranges often form before strong swings and prepare for sharp trend reversals once the general atmosphere changes.
Institutional and associated demand for exchange-traded funds (ETFs) supports the market
According to Arc Invest data, institutional investor participation in Bitcoin is growing rapidly:
- Holdings of digital asset vaults (DATs) from publicly traded companies increased by 40% in 2025, reaching 1.1 million Bitcoins, or 5.6% of the total supply.
- US spot Bitcoin ETFs currently hold 1.3 million Bitcoins – about 6.6% of the supply – which is an unprecedented number, and it is notable that each new spike in ETF provider balances has preceded a new start in the cycle.
- ETF providers and digital asset treasuries (DATs) collectively hold 12.2% of the total Bitcoin supply, highlighting the important role of institutional aggregation in reducing available supply.
In contrast, derivatives data shows a healthy, if not very active, market, with funding rates (total derivative contracts outstanding) for futures approaching 2.1%, while the basis for three-month futures is around 7.6%, well below the highs recorded for the 2021 bull market, when they reached 43% and 17% respectively, suggesting that usage of the instrument is contained. Leverage and speculative activities are within reasonable limits.
Macroeconomic trends: falling inflation, increasing productivity
ARK macroeconomic analysts expect falling inflation and weak labor market dynamics to push the Federal Reserve to adopt less hawkish policies, as the U.S. employment differential turned negative for the first time since 2020, the quit rate fell to 1.9%, and the average unemployment spell extended to 24.5 weeks.
Along with the decline in the labor market, inflation is also easing, with the inflation-linked Consumer Price Index (CPI) reading below 3% year-on-year, well below official figures. Given the minimal impact of tariffs on inflation, ARK believes that the Fed will now shift its focus from inflation to employment, easing financial conditions, a historically favorable environment for Bitcoin.
Deregulation and investment incentives are also expected to help reduce taxes under the One Big Beautiful Bill (OBBB), which could trigger a productivity boom, with continued spending on research and development, software and hardware expected to boost real GDP growth in 2026.
ARK believes that this structural growth reinforces the attractiveness of Bitcoin as a technological and monetary hedge. Therefore, Bitcoin could benefit from this situation as investors look for better investment opportunities.
Bitcoin technical analysis: Bulls defend $108,000 support level
From a technical perspective, Bitcoin price has regained stability, but remains confined within a tight trading range, where the $108,000 to $110,000 range corresponds to the 200-day moving average line (DMA-200) and the blockchain data-derived support level of $104,772. While the relative strength of 40.6 indicates that the currency is going through an oversold wave, the gradually falling MACD bars indicate decreasing selling pressures.
If Bitcoin price manages to break the $117,000 barrier, it could trigger a lightning move towards the $124,000-$126,000 range to retest its recent highs. On the other hand, failing to maintain the $108,000 level could put the price at risk of a decline towards $103,000 and perhaps $98,200, which corresponds to the 50% Fibonacci retracement level from early June.
Looking at medium term traders, the analysis supported by ARK data indicates a buying opportunity to exploit the dip to $108,000 with a slight risk of falling below $107,500 (where a stop loss order must be placed below) with the aim of reaching the $124,000 to $126,000 range.
Outlook Summary: Bitcoin Poised for Growth, but Vulnerable to Volatility
The ARK report concludes that while the timing of the Bitcoin market cycle suggests late-stage bull market conditions (approximately 18 months post-halving), structural fundamentals remain very positive, especially as the superior security of the Bitcoin blockchain, institutional consolidation, and diminishing macroeconomic pressures provide a strong platform for launch, even as increased Supply density suggests a sharp increase in volatility in the future.
short: The Bitcoin price may experience fluctuations before recovering, but its long-term trajectory is still upward, supported by unprecedented institutional investment volumes, decreasing supply, and improving overall liquidity. As 2025 draws to a close, its next destination could be shaped by 2026.
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