• Data from Glassnode shows that about 77% of the total Bitcoin supply is now in profit.
• The “percent supply in profit” metric works by going through the on-chain history of each coin to check what price it was last moved at.
• The 7-day EMA value of the metric has surged in recent days and is currently at its highest level since 2017.
77% Of Total Bitcoin Supply Is Now In Profit
Data from Glassnode has revealed a significant increase in the amount of Bitcoin (BTC) that is currently carrying some amount of unrealized profit. According to their latest report, an additional 32.3% of the supply has entered into a state of profit, bringing the total number to 77%.
How Does „Percent Supply In Profit“ Work?
The indicator used to measure this phenomenon is called “percent supply in profit” which works by going through the on-chain history of each coin in the circulating supply and checking what price it was last moved at. If this previous price for any coin was less than the current BTC value, then that specific coin is carrying a profit right now, and it will be added up to get a total value for this metric.
7-Day EMA Value Of Metric Surges
The 7-day Exponential Moving Average (EMA) value of this metric seems to have surged in recent days as more BTC coins are entering into a state of profit with the rally so far this year. This 7-day EMA reached its lowest point following a crash due to FTX exchange collapse when only 44.7% (8.6 million BTC) remained within profits margins. However, with start of rally, 6.2 million additional BTC coins have come into profits and brought up overall percentage up to 77%.
High Values Signal Higher Chance Of Price Tops
Generally, when percent supply in much higher levels it signals higher chance for price tops formation as investors tend to sell off and harvest gains they have accumulated over time frame. On other hand lower values imply large number of coins still remain underwater and hence holders don’t have much incentive for selling their coins off or taking profits out from market yet..
With 77% percent supply currently being profitable; we can expect some top formation soon as investors will try capitalize on their gains made during 2021 rally before bearish trends set back again later down line..