Bitcoin’s recent price breakout, which lifted the cryptocurrency from about $62,000 to briefly reach $80,000 in just one week, has helped many investors recover losses.
Following the sharp rebound, analysis from crypto analytics platform CryptoQuant showed that 69% of Bitcoin’s supply is currently in profit.
Bitcoin’s profitable supply paints a mixed picture
A large proportion of Bitcoin’s supply being in profit is generally considered bullish. It indicates that many holders have moved above their purchase prices, a development that can strengthen investor confidence and reduce selling pressure.
However, the broader supply-based data presents a more mixed outlook and has raised concerns among market analysts. Historical figures show that Bitcoin’s supply in profit has remained above 50% for most of the current market cycle, making the latest reading less unusual than it might initially appear.
The metric fell below 50% for only 15 days, particularly before Bitcoin’s rally in July. Although most of Bitcoin’s supply has consistently remained profitable, the data indicates that the elevated percentage has been supported by tokens that have stayed dormant for years. Some of those coins may remain inactive for an extended period.
$617 billion of Bitcoin remains underwater
Despite the high percentage of Bitcoin’s supply in profit, the amount of capital invested in the cryptocurrency shows that many investors have yet to recover their gains.
According to the data, $617 billion of the total capital represented by Bitcoin’s supply remains at a loss. The overall value of that supply exceeds $1 trillion.
This suggests that, despite the recent increase in Bitcoin’s profitable supply, a significant portion of the capital invested in the asset has not yet returned to profit.
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