Bitcoin Supply Decreases by 10% 📉: Learn from Past Crashes 🚀

Bitcoin Holders in Profit Drop to Around 90%

According to analyst James Van Straten, approximately 10% of the Bitcoin (BTC) supply is currently at a loss. The key metric to consider here is the “Percent Supply in Profit,” which indicates the percentage of the total circulating Bitcoin supply that is holding an unrealized gain.

The metric analyzes the blockchain history of each coin in circulation to determine the price at which it was last transferred.
If the cost basis of a coin is lower than the current spot price of the cryptocurrency, it is considered to be in profit and included in the supply in profit.

Percent Supply in Profit vs. Percent Supply in Loss

The Percent Supply in Profit accounts for all coins in profit and calculates the percentage they represent of the total supply. Conversely, the Percent Supply in Loss accounts for coins not meeting this condition. Since the total circulating supply adds up to 100%, the Percent Supply in Loss can be calculated by subtracting the Percent Supply in Profit from 100.

Implications of Profitability Levels

Historically, high levels of Percent Supply in Profit have often signaled market tops as profitable investors are more likely to sell their holdings. Conversely, market bottoms become more likely when profitability levels are low. Despite the current value of 90% being relatively high, it is not uncommon during bullish trends with strong demand and new all-time highs being reached.

High levels of Profit Supply may lead to a potential selloff, while low levels may indicate a market bottom.
The cooling off of profitability compared to previous levels could be beneficial for the sustainability of the ongoing rally.