On-chain data reveals that the Bitcoin Supply in Profit has not yet fallen below this crucial threshold in the ongoing cycle, a potentially positive indicator for BTC.
Bitcoin Supply in Profit Remains Above 70% to Date
In a CryptoQuant Quicktake update, an analyst discussed the current trends surrounding Bitcoin’s Supply in Profit. The “Supply in Profit” metric tracks the percentage of the total circulating BTC that is held at a net unrealized profit.
This metric assesses the transaction history of each coin in the circulating supply to determine the price at which it was last transferred. The last transaction of any token typically signifies the point at which it changed ownership, establishing its current cost basis.
Consequently, if the acquisition price for a specific coin is below the latest market price, that coin is deemed to be holding a net gain. The Supply in Profit aggregates all tokens meeting this criterion and quantifies their proportion within the total supply.
Conversely, another indicator known as Supply in Loss pertains to the tokens exhibiting the opposite condition. Its value can be calculated by subtracting the Supply in Profit from 100, as both metrics should sum to 100%.
Here is the chart depicting the Bitcoin Supply in Profit, shared by the analyst, illustrating its value trend over the past several years:
The above graph clearly indicates that the Bitcoin Supply in Profit previously reached the 100% level when the cryptocurrency achieved new all-time highs (ATHs). However, following the recent drawdown, the indicator has declined significantly.
In the chart, the analyst highlights two significant lines for the asset. The lower line (marked in orange) corresponds to 70%. Historically, dropping below this threshold has signaled the onset of a bear market for BTC.
To date, Bitcoin has managed to stay above this level in the current cycle. It came close during last year’s consolidation phase. A level that the asset has already dipped below multiple times this cycle is the 80% mark, indicated in yellow.
The recent decline pushed the Supply in Profit below 80%, but a subsequent recovery rally indicates it is nearing a retest of this line. In both past and present cycles, the initial breakout above this line has heralded the commencement of a bull market for the cryptocurrency.
Reflecting on the observed pattern, the analyst remarked, “The next target is to elevate the supply in profit back to 80% to signal robust bullish momentum.”
BTC Price
Currently, Bitcoin has retraced part of its recent gains as its price has dipped back to $83,900 in the past day.
