Bitcoin price nears all-time high and supply hits profit

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The following is taken from a recent edition of Deep Dive, Bitcoin Magazine’s high-end market newsletter. To be among the first to receive this and other on-chain bitcoin market analysis straight to your inbox, subscribe now.

Profit supply

As we approach historic highs in the price of bitcoin, we will start to see the percentage of circulating supply in profits climb to 100%. More importantly, we will see the supply of long-term holders climb to higher profit ranges. Since long-term holders lead the market with 81% of supply in circulation, their profit-taking behavior is critical in identifying when the market may cool down as prices start to hit new highs. Long-term holders making huge profits in previous ATHs signaled the cooling of the spot market as derivatives markets took over.

Currently, 95.2% of the entire bitcoin supply is profitable. During peak periods of the bull cycle, the supply may exist at over 95% profit for several weeks before healthy declines. Even after these declines, the larger trend may exist for months during bull cycles.

Source: Glasnode

Waste supply

The supply of losing bitcoin hit its lowest level in six months. It further shows how few obstacles there are between new historic highs; any holder who wishes to break even to breakeven will likely have the opportunity over the next few days / weeks to come.

Source: Glassnode

With the feverish increase in holdings of long-time holders since mid-2021, the percentage of supply held by said holders continues to reach all-time highs.

A different (reverse) look, showing the percentage of supply from short-term holders, shows the historical compression of the current supply. Historically, when the supply of short-term holders approaches around 20%, an upward movement in bitcoin is in play. The proverbial spring seems to be as coiled as ever.

Source: Glassnode

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