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.
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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.
