Recent analysis indicates Bitcoin Supply in Profit has increased to 87.3%, attributed to rising prices. The Supply in Profit is defined by comparing last transaction prices to current market values. Historically, when this metric exceeds 90% for a period, it signals euphoria, suggesting strong market sentiment, but Bitcoin hasn’t reached that state yet.
Recent data from Glassnode reveals that the Bitcoin Supply in Profit has surged to 87.3%. This indicator measures the percentage of Bitcoin currently being held at unrealised gains. It accomplishes this by assessing the last transaction price of each coin against its current market value. If the coin’s last known price is less than today’s price, it’s added to the profit tally. Conversely, those in a loss scenario are tracked by a separate metric, with both indicators summing to 100%.
The sharp uptick in the Supply in Profit correlates directly with the recent rally in Bitcoin’s price. After hitting a notable value of 87.3%, notable is the fact that during Bitcoin’s previous peak at around $94,000, this indicator registered only 82.7%. This suggests that a segment of coins previously bought at higher prices has traded hands at lower price points recently.
In general, when a significant number of investors find themselves in profit, they tend to seize the opportunity to sell their holdings. Therefore, previous trends in Bitcoin show that Supply in Profit hitting extreme levels could precede a price top. Surprisingly, though, a stable high reading of this metric can signal robust market demand, helping to sustain prices amid profit-taking sales.
Glassnode highlights that historically, when the Supply in Profit stabilises above 90% for a prolonged period, it tends to usher in a state of market euphoria. This indicates widespread profitability and a boost in investor confidence. However, Bitcoin hasn’t quite hit that particular euphoric phase just yet.
As for Bitcoin’s price itself, it briefly climbed over the $95,000 mark earlier today but has since dipped slightly, now sitting at approximately $94,800. This minor pullback comes amid the observed trends over the past few days, hinting at some market volatility.
