Almost the entirety of Bitcoin’s supply is currently profitable following a recent surge, but increasing leverage and “crowded call positioning” may indicate heightened short-term fragility, as highlighted by on-chain analytics.
As of Wednesday, 97% of Bitcoin (BTC) supply is in profit, reported blockchain analytics firm Glassnode.
“Building on the accumulation trend, Bitcoin’s rally to a new all-time high has returned nearly all circulating supply to profitability.”
High profit levels often precede consolidation, and realized profits remain contained, “suggesting an orderly rotation instead of distribution pressure,” the analysts noted.
This indicates that investors have been steadily realizing profits and reallocating their assets rather than engaging in panic selling. Such behavior is characteristic of a healthy bull market, where profit-taking is balanced by new demand.
Possible pullback to $117,000
Glassnode utilized a “Cost Basis Distribution Heatmap” to highlight structural support, noting that it is limited between $121,000 and $120,000 but stronger near $117,000, where approximately 190,000 BTC were acquired last.
“While phases of price discovery inherently carry exhaustion risks, a pullback into this area could attract renewed demand as recent buyers defend profitable entry points.”
This makes the $117,000 zone a crucial area to monitor for “stabilization and renewed momentum.”
Rising ETF and futures volumes
Glassnode also noted that “surging volumes confirm strong institutional demand” in Bitcoin futures and spot ETF markets, yet increasing leverage and funding rates may “introduce short-term fragility.”
Spot Bitcoin ETFs in the U.S. have attracted over $2.5 billion in inflows, including their second-highest inflow day, in the first three days of this week, according to CoinGlass.
Related: Here’s the real reason the 4-year Bitcoin cycle is dead: Arthur Hayes
This week’s on-chain signals depict a “robust yet maturing uptrend, one that remains supported but increasingly sensitive to profit-taking and leverage resets as Bitcoin navigates price discovery,” the analysts concluded.
BTC prices have decreased from a late Wednesday peak of $124,000 to just below $122,000 at the time of writing.
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