Despite the volatility experienced by Bitcoin in 2023, the prolonged sideways movement from February to July proved to be fertile soil for accumulation. Our on-chain analysis shows that short-term holders (STH) and long-term holders (LTH) have been steadily accumulating over the past quarter, indicating a strong belief in the asset’s long-term value.
Measuring Bitcoin supply in profit or loss is an essential part of analyzing the market. These indicators provide valuable insight into market sentiment and investor behavior. A high supply of profits indicates that investors are holding onto assets in hopes of further price appreciation. Conversely, an increase in loss supply can signal a potential sell-off.
During a period of high price volatility from September to December 2022, supply in P&L converged multiple times, reflecting market uncertainty.
However, from early 2023, the situation has changed. Profit and loss supply diverged, and he increased the ratio of supply to profit by more than 53%. According to Glassnode data, 14.61 million BTC is currently profitable, while 4.34 million BTC is in loss.
As of July 11, 75% of supply is profitable and only 25% is loss. This key equilibrium is reminiscent of the scenario witnessed at the midpoint of the 2016 and 2019 market cycles. Glassnode’s data further revealed that 50% of Bitcoin trading days had a higher P&L balance and 50% had a lower P&L balance.
The current accumulation phase, and the resulting profit of 75% of Bitcoin’s circulating supply, bodes well for the cryptocurrency. If past patterns continue, this could be the midpoint of Bitcoin’s current market cycle, having reached a bottom, suggesting the market is now gearing up for an upside.
However, it is important to consider that while past patterns provide useful context, they are not always predictive of future behavior. Today’s Bitcoin market is more affected than ever by a number of macro factors, including regulatory developments and the broader economic climate.
Post-Heavy Accumulation, with a profit of 75% of Bitcoin’s circulating supply, first appeared on CryptoSlate.
