Bitcoin 2 Months Through Euphoria Wave, How Long Was The Last One?

On-chain data shows Bitcoin has been going through a euphoria wave for two months. Heres how long it was in this phase during the last bull run. Bitcoin Has Been In Euphoria Wave Phase According To Supply In Profit According to the latest weekly report from the on-chain analytics firm Glassnode, the current BTC cycle [...]

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Bitcoin Plunge To $29,200 Sends 5.9% Of Supply Into Loss

On-chain data shows an additional 5.9% of the total Bitcoin supply has entered into losses as the cryptocurrency’s price has plummeted to $29,200 today. Bitcoin Supply In Profit Has Declined To 70.4% After Today’s Price Plunge According to data from the on-chain analytics firm Glassnode, 1.11 million BTC has gone underwater with the latest asset value drop. The relevant indicator here is the “percent supply in profit,” which tells us about the percentage of the total Bitcoin supply currently carrying some profit. Related Reading: Bitcoin Cash Price Could Restart Rally To $300 If It Breaks This Resistance This metric works by going through the on-chain history of each coin in circulation to see what price it was previously moved at on the network. If this last transfer price for any coin were less than the current spot price of the asset, then that particular coin would be holding an unrealized gain currently. The percent supply in profit adds up all such coins and calculates what part of the total supply they make up for. A counterpart indicator called the “percent supply in loss” keeps track of the opposite type of tokens, and its value can be simply found by subtracting the supply in profit from 100. Now, here is a chart that shows the trend in the Bitcoin percent supply in profit over the past day or so: The value of the indicator seems to have taken a hit in recent hours | Source: Glassnode on Twitter As displayed in the above graph, the Bitcoin percent supply in profit had been floating around 76.3% when the cryptocurrency price was above $30,200 yesterday. With the plunge to $29,200 over the past day, though, the metric has also taken a sharp hit, as only 70.4% of the total circulating supply is holding some unrealized profit now. Historically, whenever the profit in supply has crossed the 75% mark, declines in the price have become more probable. This is because investors become more likely to sell the more profits they hold. The latest tumble in the asset may have come because of this, as the investors who had been sitting on profits may have buckled and sold their coins to harvest their gains. As the metric has cooled down well below the 75% mark now, it’s possible that this may be it for the correction. Before the plunge to $29,200, Bitcoin had been consolidating above $30,000 since many weeks ago. As buying and selling took place in this sideways trend, many investors slowly gained their cost basis at or above this level. Related Reading: Bitcoin (BTC) Address Dormant For More Than 11 Years Moves $31 Million In BTC Due to this reason, the drop below this level has resulted in a significant part of the supply going into loss. More specifically, around 1.11 million BTC (equivalent to 5.9% of the total supply) has entered into the red. BTC Price At the time of writing, Bitcoin is trading around $29,100, down 4% in the last week. BTC has seen a sharp drop during the last 24 hours | Source: BTCUSD on TradingView Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, Glassnode.com

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95% Of Bitcoin Now In Profit: Why This Could Be A Signal To Sell

On-chain data shows the Bitcoin supply in profit has reached levels that led to some tops in the past, like the peak of the April 2019 rally. Bitcoin Supply In Profit Has Shot Up Following BTC’s Latest Run As pointed out by an analyst in a CryptoQuant Quicktake post, Bitcoin supply in profit has hit very high levels after the asset’s latest rally. The “supply in profit” here refers to a metric that measures the percentage of the total circulating BTC supply that’s currently carrying some amount of unrealized gain. This indicator works by going through the transaction history of each coin (more precisely, each UTXO) on the blockchain to see what price it was last moved at. Assuming that the previous transfer of the coin was the last time it changed hands, the price at that instance would act as its current cost basis. Related Reading: Ethereum Leaves Bitcoin Behind, But Is This Rally Sustainable? As such, if the previous transfer price for any coin was less than the spot value of the cryptocurrency right now, then that particular coin would be holding a profit currently. The supply in profit sums up all such coins and calculates what percentage of the total supply they make up for. A counterpart indicator called the “supply in loss” does the same for coins of the opposite type (that is, those with a cost basis lower than the current price). This metric’s value can also simply be found by subtracting the supply in profit from 100 (since the total supply must add up to 100%). Now, here is a chart that shows the trend in the Bitcoin supply in profit over the past few years: The value of the metric seems to have been going up in recent days | Source: CryptoQuant As displayed in the above graph, the Bitcoin supply in profit has naturally shot up recently as the asset’s price has gone through its rally. After the latest continuation of the run towards the $57,000 level, the metric has hit the 95% mark. This means that 95% of all UTXOs in existence is carrying a profit at the moment. This may not entirely be a positive thing, however, if history is anything to go by. As the quant has highlighted in the chart, the BTC rally that started in April 2019 topped out just as the supply in profit hit the same high levels as right now. Similarly, the local top in 2020 at the beginning of the last bull market also coincided with these levels. The reason behind this pattern is likely to be the fact that investors in profit are more likely to sell their coins at any point. Thus, when a large percentage of holders are carrying gains, the probability of a mass selloff can spike up. Related Reading: XRP Forms Buy Signal, Analyst Predicts Surge To This Target That said, in the 2017 and 2021 bull runs, as well as during the November 2021 peak, the indicator did manage to surpass these levels for a while before the top was encountered. As such, it remains to be seen if the current rally is similar to the likes of the April 2019 run, in which case a top might be hit here, or if it’s a proper bull run, meaning that there might still be a while to go before the peak. BTC Price At the time of writing, Bitcoin is trading around the $56,500 level, up 8% over the past week. Looks like the price of the asset has enjoyed a sharp rally today | Source: BTCUSD on TradingView Featured image from Kanchanara on Unsplash.com, CryptoQuant.com, chart from TradingView.com

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75% Of Bitcoin Supply Now In Profit, Will A Drop Happen Here?

On-chain data shows 75% of the entire Bitcoin circulating supply is now in profit, something that could lead to a drop for the asset. Bitcoin Supply In Profit Has Registered An Uptick Recently As pointed out by an analyst in a CryptoQuant post, there may be a risk that the investors would participate in profit-taking [...]

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