Bitcoin: 87% Of The Supply In Profit, Soon The Euphoric Phase?

In the crypto world, certain indicators are crucial for assessing market trends. One of the most followed is Bitcoin’s “Supply in Profit,” which shows what percentage of the total supply is currently in unrealized gains. With 87% recently reached, many wonder if this marks the onset of an euphoria phase. Crypto traders need to ask themselves: how likely is the market to reverse?

“Supply in Profit”: a rising indicator

Bitcoin’s “Supply in Profit” recently crossed the 87% mark, a high level that deserves close observation. This indicator calculates the proportion of the total BTC supply, capped at 21 million, whose purchase price is lower than the current market value. When the majority of the supply is in profit, it can signal strong investor confidence, but also a risk of selling to take profits.

According to Glassnode, this rise is directly linked to the recent increase in bitcoin prices. The latest market peak saw the indicator rise to 87.3%. Note that during the last bitcoin rally, at around $94,000, this indicator stood at 82.7%.

This means that nearly 5% of the supply purchased during previous peaks has been traded at lower prices in recent weeks.

This high percentage can be a sign of selling pressure, as investors in profit are often more inclined to sell. However, some analysts note that maintaining a high level of “Supply in Profit” can also indicate sustained demand, which supports the price despite sales.

The “Supply in Profit” indicator and its impact on market trends

The “Supply in Profit” indicator is an excellent tool to understand market expectations. When a large portion of investors hold coins in profit, it can signal widespread confidence. However, it can also lead to selling pressure when these same investors decide to realize their profits.

Indeed, as explained by BGeometrics:

A strong supply in profit may mean selling pressure is imminent, as investors look to secure their gains.

This phenomenon could lead to market consolidation or even a short-term correction. However, this situation is not necessarily negative. If demand remains strong, the indicator can also signal that the market is strong enough to withstand selling pressure without collapsing.

The real selling pressure is not applied by whales or long-term holders, but by retail, mid-sized cohorts (from shrimp to sharks), and short-term holders – a classic shakeout

CryptoQuant

Continuous increases in supply in profit indicate healthy market momentum, but they must be closely monitored. A saturation of the indicator, as seen in the past, could signal that the market has reached a point where selling becomes more likely, potentially leading to a correction or stabilization.

Current situation: Can Bitcoin maintain its momentum?

The price of bitcoin remains above $94,800 after briefly breaking past $95,000. This stability despite a high percentage of “Supply in Profit” suggests demand continues to support the price. However, the question remains: can BTC continue to rise without massive profit-taking? Previous euphoria phases showed that rapid selling by investors in profit can sometimes slow down the market.

According to Glassnode, the “Supply in Profit” indicator has often reached high levels before a correction, but has never sustained the 90% threshold traditionally signaling a phase of euphoria. If bitcoin manages to maintain a high “Supply in Profit” without massive selling, it could extend its rally.

Otherwise, it might enter a phase of consolidation before rising again.

Investors should be aware that selling pressure can emerge at any time, especially if the indicator continues to rise. However, as long as demand remains strong, bitcoin could avoid a significant drop, which is a good sign for its short-term future.

Bitcoin’s rise above $90,000 marked a key milestone. But with 87% of its supply in profit, the question remains: is a correction coming? BTC could see an additional peak if demand stays strong, but the “Supply in Profit” indicator reminds us that profit-taking could be imminent. The market remains tense but promising.