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  5. Bitcoin Supply On Earnings Drops To 55%, Has It Bottomed Yet?

Bitcoin Supply On Earnings Drops To 55%, Has It Bottomed Yet?



Bitcoin Supply On Earnings Drops To 55%, Has It Bottomed Yet?


On-chain data shows that Bitcoin’s profit supply has recently dropped to just 55%. This is what the historical trend suggests as to whether or not the bottom has already been reached.

About 45% of the bitcoin supply is underwater right now

As one analyst pointed out in an article on CryptoQuant, in previous cycles, the supply in the green has turned even lower than current values.

“Profit Supply” is an indicator that measures the percentage of the total Bitcoin supply that is currently in profit.

The metric works by looking at the on-chain history of each coin and checking whether the price it last traded at was lower than the current price or not.

If the price of the last sale was actually lower, the coin has accumulated a profit. On the other hand, since the current value of BTC is lower, this would suggest that the coin is losing at the moment.

Now, here is a graph showing the trend of Bitcoin’s profit supply in recent years:

It seems that the value of the indicator has seen a drop recently | Source: CryptoQuant

As you can see from the chart above, Bitcoin’s supply share of profits has been declining in recent months. Currently, the value of the indicator is around 55%.

After the 2017/2018 peak, the metric value also reached similar values ​​of around 55% after some downward trend.

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After reaching these values, the profit supply drifted sideways for a while as the value of BTC looked to consolidate.

However, at the end of this sideways move, the price saw another significant drop, taking Bitcoin’s profit supply percentage to 40-year lows.

It was only after that that the background training finally took place. In 2019, it also followed a similar (but not exactly the same) pattern.

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The quant in the post thinks that if a similar trend occurs this time around, BTC price could first experience a few months of bothersome sideways movement.

After which, there will be a capitulation phase with a 30% to 50% drop in the value of Bitcoin, before finally bottoming out.

BTC price

At the time of writing, the price of Bitcoin is hovering around $28.9,000, down 5% over the past seven days. During the last month, the cryptocurrency has lost 24% of its value.

The chart below shows the price trend of the coin in the last five days.

It seems that the price of the coin has dropped in the last two days | Source: BTCUSD on TradingView Featured Image from Unsplash.com, Charts from TradingView.com, CryptoQuant.com

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