Bitcoin Supply In Profit Is Still Greater Than Supply In Loss
In a new on X, James V. Straten, a research and data analyst, has pointed out how BTC isn’t fulfilling the bottom condition for the supply in profit and loss metrics.The “supply in profit” here naturally refers to the total amount of Bitcoin supply currently carrying an unrealized profit. Similarly, the “supply in loss” keeps track of the number of underwater coins.
Looks like the two metrics are still far apart in value currently | Source:In the graph, the analyst has highlighted a specific pattern that these two indicators have shown during historical bottoms in the cryptocurrency’s price. It would appear that the supply in profit dips below the supply in loss during these periods of lows, implying that most of the market enters into a state of loss. Generally, investors in profit are more likely to sell, so whenever the supply in profit is at very high values, tops become more probable for Bitcoin. Similarly, a large number of investors instead of being in loss should mean there wouldn’t be too many sellers left. This is potentially why bottoms have historically formed when the supply in loss exceeds the supply in profit. The chart shows that the Bitcoin Supply in Profit is currently quite a distance over the supply in loss, suggesting that a decent number of coins still carry gains.
However, the bottoms that the pattern has generally coincided with have been the cyclical lows, observed during the worst phase of the bear markets. In the current cycle, this bottom was marked after the FTX crash in November 2022.
The only exception to this rule was in March 2020, when Bitcoin crashed due to the onset of the COVID-19 virus. This crash was an unexpected event, which may explain why it doesn’t fit in with the other bottoms. As the market at its current stage is likely already past the bear-market bottom, this supply in profit and loss pattern shouldn’t hold too much bearing on whether BTC has hit a local bottom after the recent crash. If the November 2022 low wasn’t the true bear-market bottom, BTC might have more pain in store, as a significant swing in market profitability will be required before the real bottom is found.BTC Price
When writing, Bitcoin is trading around $26,300, down 7% in the last seven days.BTC hasn't moved too much since the crash | Source: