Bitcoin Supply in Profit Takes a Hit After Price Plunge
On-chain data shows that the recent plummet of Bitcoin’s price towards $26,500 has caused a 10% increase in the total supply in a state of loss. The supply in profit has dropped from 71% to 61% after the crash, according to analytics firm Glassnode. This drop in the “percent supply in profit” indicator is due to the market previously being “top-heavy”. The indicator measures the percentage of the circulating Bitcoin supply that currently carries unrealized loss.
Main Breakdown:
- The supply in profit has decreased from 71% to 61% after the price plunge.
- The “percent supply in profit” indicator measures the percentage of circulating Bitcoin supply with unrealized loss.
- Coins in profit are determined by comparing their previous selling price to the current spot price.
- Coins not meeting the profit criteria are categorized as losses.
- The sudden decrease in the indicator is due to the concentration of supply near the $30,000 mark before the crash.
This sharp drawdown in the Bitcoin percent supply in profit can be seen in the graph provided. While the majority of the supply is still in profit, the 10% decrease is significant. The distribution of realized prices in the market before the crash is the reason behind this plummet.
Hot Take:
The recent crash in Bitcoin’s price has resulted in a significant shift in the profit-loss balance. The concentration of supply near a specific price level made the market top-heavy, making it sensitive to price movements. As a result, the sudden plunge has affected the supply in profit. Bitcoin is currently trading around $26,500, down 10% in the last week.
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