Bitcoin Supply In Profit: A Potential Transition Brewing?
Analysts have observed a recent trend in the “Supply in Profit” indicator for Bitcoin that could indicate a potential entry into a transition zone.
- The Supply in Profit metric tracks the percentage of circulating BTC holding net unrealized profit.
- This indicator reviews the transfer history of each coin to determine its cost basis compared to the current spot price.
- If a coin’s previous transfer price is lower than the current price, it is deemed to be in profit.
- The Supply in Profit calculates the total supply of coins in profit based on this condition.
Bitcoin Supply In Profit Trends
Recent data shows the Bitcoin Supply in Profit indicator dipping into the “transition” zone following the latest price recovery to $64,000.
- The indicator slipped under the 80% mark, signaling a shift between bull and bear phases.
- While the recovery back into the bull market zone is positive, doubts linger on the sustainability of this upward trend.
- Similar trends were seen in July when the indicator briefly entered the transition zone before rebounding.
- The overall trajectory of the Bitcoin Supply in Profit has been downward in recent months, hinting at a potential downturn ahead.
Potential Market Impact
If the indicator experiences another drawdown into the transition zone, Bitcoin could face a period of decline, potentially leading to a new bear market.
- The future trajectory of the Bitcoin price and the Supply in Profit indicator will determine the market outlook moving forward.
- Monitoring how these factors evolve in the coming days will provide insights into the cryptocurrency’s performance.
Bitcoin Price Movement
Bitcoin has witnessed a nearly 10% surge in the past week, driving its price to $63,900.
Hot Take: Stay Informed, Plan Ahead
As a crypto enthusiast, staying informed about key indicators like the Supply in Profit can help you plan your investment strategy and navigate potential market shifts effectively. Keep track of the evolving trends and be prepared for various scenarios to make informed decisions in the dynamic crypto landscape.
Sources:
https://cryptoquant.com/insights/quicktake/66cb4d04a409da60dc7375a8-BTC-Potential-Entry-into-a-Cycle-Transition
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