Bitcoin Supply in Profit Metric Hits 4-month High – What This Means for BTC Price
A 30-day Exponential Moving Average of the number of Bitcoins that are “in profit” – i.e. were acquired at a time when the BTC price was lower – hit a 2-month high on the 19th of January, according to crypto data and on-chain analytics firm Glassnode.
In wake of the latest Bitcoin rally that has seen the world’s largest cryptocurrency by market capitalization regain the $21,000 following a near 30% rally since the start of the month, Glassnode’s 30-day EMA of Bitcoin Supply in Profit rose to over 10.5 million coins. That’s its highest since last September. At present, there are 19.27 million Bitcoins in circulation of a total 21 million that can ever be mined.
As a result, the Supply in Profit Trend is now positive, says Glassnode. “During positive market trends, the volume of BTC supply that was acquired at lower prices tends to increase, putting more supply into an unrealized profit,” the crypto analytics firm explains.
“As such, macro trend shifts in the volume of Supply in Profit can signal when a heavy concentration of investor cost basis has recently transitioned between unrealized profit, or loss,” Glassnode adds. “Often these occur near macro market cycle changes”.
The above indicator uses an EMA in order to give a less volatile result, potentially functioning as a better signal of a turn in the market. But a more basic measure of Supply in Profit also seems to be sending a bullish signal.
According to Glassnode, 66.9% of Bitcoins were in profit on Thursday the 19th of January, up from around 50% at the turn of the year. That means around 12.9 million Bitcoins last moved when the price was lower.
Looking at a longer-term history of Glassnode’s more basic Supply in Profit metric, a recovery from under 50% often occurs
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