Bitcoin supply in profit has plummeted to a 3-year low, reaching 58%, a 42% fall from it's last ATH (all time high) last October. This means nearly 42% of the total supply is now "underwater" (held at an unrealized loss).
The chart evaluates the sum of UTXOs being in profit or not by comparing the price between created and destroyed. The last time Bitcoin visited this area, Bitcoin price was around $26K.
Looking at the timeline, the current level of ~58% profit is the lowest we’ve seen since the early 2023 recovery phase. This level often signals a transition from "mania" to "capitulation." Short-term holders who bought the top are likely panicking, while long-term "smart money" typically looks for these dips (where profit supply is low) to begin accumulating again.
The "froth" has been wiped out. And while the price drop hurts, the Supply in Profit metric hitting sub-60% is actually a healthy reset for the macro trend. It flushes out leveraged traders and "weak hands," transferring coins to those with a lower cost basis and higher conviction.
Written by EgyHash