Bitcoin Supply In Profit Hits 87%—Are Euphoria Levels Here Yet?

Bitcoin’s supply in profit just hit 87%—a level that historically signals overheated markets. Are we nearing peak euphoria, or is this just another pitstop on the way to new all-time highs?

The Profit Paradox:
When this many holders are in the green, it usually triggers sell-offs. But with institutional money flooding in, old rules might not apply. Cue the ’this time it’s different’ chorus.

Wall Street’s Crypto Tan:
Traders are bronzing their portfolios with BTC exposure while still pretending to understand DeFi. Nothing says ’bull market’ like hedge funds FOMO-ing into an asset they mocked three years ago.

One thing’s certain: when even crypto Twitter stops making ’wen lambo’ jokes and starts discussing risk management, brace for impact.

Bitcoin Supply In Profit Has Crossed The 87% Mark

According to the latest weekly report from Glassnode, the Bitcoin Supply in Profit has marked an improvement alongside the latest rally in the cryptocurrency’s price.

The “Supply in Profit” here refers to an on-chain indicator that keeps track of the percentage of the total BTC supply that’s currently being held at some unrealized gain.

The metric works by going through the transaction history of each coin in circulation to see what price it was last moved at. If this last transaction value of any coin is lower than the current spot price for any coin, then that particular token is assumed to be carrying a gain and the Supply in Profit includes it in its value.

There is also an alternate indicator known as the Supply in Loss that deals with the coins of the opposite type (that is, those with a cost basis higher than the latest price). The two metrics must sum up to 100%, so if one is known, the other can simply be calculated by subtracting it from 100.

As displayed in the above graph, the Bitcoin Supply in Profit has seen a notable jump recently. The reason behind this rise in the indicator naturally lies in the fact that BTC’s price itself has gone up during this period.

Following the increase, the metric has reached a value of 87.3%. Interestingly, the last time that BTC was trading around $94,000, the indicator was only sitting at a value of 82.7%. This would imply that almost 5% of the supply that was purchased at the bull run highs has since changed hands at the recent lower price levels.

Generally, investors who are in profit are more likely to sell their coins. As such, in the past, BTC has tended to see overheating when the Supply in Profit reaches extreme levels.

While this profit-taking can lead to a top for the asset, it can actually be a positive sign when Supply in Profit is able to sustain at high levels. This is because it indicates there is strong enough demand in the market that BTC is able to hold up its price despite the selling.

“Historically, a typical euphoria phase tends to follow this metric stabilizing above 90% for an extended period, signaling widespread profitability and elevated investor confidence,” notes Glassnode. So far, BTC hasn’t reached this phase yet.

BTC Price

Bitcoin broke above $95,000 earlier in the day, but it seems the asset has seen a minor pullback as it’s now back at $94,800.