Bitcoin Outlook: Rising U.S. Debt and Subdued Euphoria Suggest More Upside Ahead

As Bitcoin breaks above $118,000, fresh macro and on-chain data suggest the rally may still be in its early innings.

According to a chart shared by Bitcoin Magazine Pro, U.S. federal debt has remained flat throughout 2025, a rare pause after years of expansion. However, the pause may soon end, with expectations of renewed debt issuance on the horizon.

Historically, sharp increases in federal debt have coincided with major upward moves in Bitcoin’s price — as seen during the 2020–2021 and late 2022–2024 periods. If history repeats, the upcoming wave of debt expansion could serve as a major tailwind for BTC.

While macro tailwinds build, on-chain data reveals that long-term holders are still far from peak euphoria.

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Glassnode reports that Bitcoin’s Net Unrealized Profit and Loss (NUPL) for long-term holders is currently at 0.69 — below the 0.75 threshold typically associated with euphoric market tops. In contrast, the previous cycle spent over 220 days in the euphoria zone, while the current one has only touched it briefly (~30 days).

This combination — a historically bullish macro backdrop and muted on-chain sentiment — suggests the Bitcoin market may still have significant room to run.

If rising federal debt fuels liquidity and long-term holders remain confident without overheating, Bitcoin could be setting the stage for a sustained move higher — possibly beyond current all-time highs.