- As Bitcoin’s price recently rose above $47,000, data shows over 92% of its circulating supply is now profitable, nearing the 93% level seen at the last peak around $49,000.
- Historically, when over 95% of Bitcoin’s supply has been profitable it has signaled a local top in price, while less than 50% profitable has indicated a price floor.
- With profitability now at 92%, Bitcoin’s price may continue rising, but exceeding 95% could indicate overheated conditions and a potential correction ahead.
Bitcoin has recently breached the $47,000 mark, an exciting new milestone for the leading cryptocurrency. As the price continues rising, an interesting trend has emerged regarding the percentage of Bitcoin’s supply that is currently profitable.
Analyzing Bitcoin’s Profitable Supply
According to data from Glassnode, over 92% of Bitcoin’s circulating supply is now in profit. This figure represents the percentage of existing coins whose price at their last movement was lower than the current price.
Interestingly, during Bitcoin’s previous peak around $49,000, just above 93% of the supply was profitable. This demonstrates a correlation between Bitcoin’s price increases and the percentage of its supply that is profitable.
Historical Trends and Indicators
Analyzing historical data provides further insights. When over 95% of Bitcoin’s supply has been profitable, it has typically signaled a local top in the price. The most recent example was in November 2021, when Bitcoin reached its all-time high of $69,000.
On the flip side, when less than 50% of Bitcoin’s supply has been profitable, it has usually indicated a price floor is being reached. The most recent examples were during the FTX collapse in November 2022 and the COVID-19 pandemic’s market impact in March 2020.
The Road Ahead
With Bitcoin’s supply profitability now exceeding 92%, historical trends suggest the price could continue rising. However, if profitability reaches extreme levels above 95%, it may indicate overheated conditions and a potential price correction ahead. As with any investment, Bitcoin’s future price remains unpredictable. But analyzing supply profitability provides helpful perspective on where Bitcoin is in its ongoing price cycle.
