The data shows that about 15% of the total Bitcoin supply is now in a state of loss, and this value has historically been enough to depress the price.
The percentage of profitable Bitcoin supply has dropped to only 85%
According to the latest weekly report Glass node, The total supply of BTC this week has dropped to 85%, which means that 15% of the supply is now at a loss.
The “Profit Supply Percentage” is a Bitcoin indicator that highlights the current profitable share of the total supply.
This indicator works by looking at the price of the last move of each coin in the chain. If this price is lower than the current price, the token is said to be profitable. And if this price is higher, then the coin is considered a loss.
If this indicator reaches a very high value (over 95%), then the top of the Bitcoin market may soon appear. However, if the value of the indicator is low enough (less than 5%), it may form a bottom.
Now, this is a chart showing the value trend of BTC supply percentage in profit in the past year:
Looks like only 85% of the BTC supply is now in profit | Source: The Glassnode Week Onchain (Week 47)
As shown in the figure above, as the price of Bitcoin has risen, the percentage of profit supply in the past week has severely declined decline. Now, about 15% of the total supply is at a loss.
The report mentioned that 85%-90% of the area may be considered a “bull-bear transition zone.” There are two instances of indicators entering this area in the previous chart.
The first time was when the Bitcoin crash occurred in May, and the second time was El Salvador Day CrashThe report states that if a higher value is not required within a reasonable time frame, 85% of the value is enough to depress the price of cryptocurrencies, similar to what happens in these situations.
At the time of writing, Bitcoin price Floating around US$56,800, it has fallen by 6% in the past 7 days. In the past month, the value of the token has fallen by 5%.
The chart below shows the price trend of BTC over the past five days.
BTC's price slides down in the last few days | Source: BTCUSD on TradingView
In the past week, Bitcoin has been below $60,000 most of the time. At present, it is not clear when the tokens can recover, but if the supply percentage in profit is considered, BTC may fall further.
Featured image from Unsplash.com, charts from CryptoQuant.com, TradingView.com