Bitcoin (BTC) Supply in Profit at 88% Signals Strong Market Support

88% of the Bitcoin supply is now profitable as the market recovers from its March lows, with data indicating a strong foundation underlying current levels. Bitcoin (BTC) may face short-term volatility, but new on-chain data from Glassnode reveals a strong underlying foundation in the market

Despite a recent drop from its all-time high (ATH) of more than $109,000, Bitcoin (BTC) has recovered from its April lows under $75,000 to consolidate over $94,000, with 88% of its circulating supply in profit.

Market Reset with Strong Fundamentals

According to Glassnode, Bitcoin’s Market Value to Realised Value (MVRV) ratio has settled at 1.74, which is the long-term average. According to the analytics firm, such a reset level has historically coincided with times of market consolidation, with the most recent example being an August 2022 fall in which unrealised gains were similarly reduced before another stride upward. 

Meanwhile, the realised profit/loss ratio has risen over 1.0, indicating a shift in attitude as traders exit underwater positions to take tiny profits. According to Glassnode’s study, the development implies that the market has the liquidity and confidence to absorb the realised gains, which is an essential indicator of strength. 

Macro indicators appear to align, as analyst Axel Adler Jr. highlights that Bitcoin’s 30-day change in the Composite Volatility Index remains at -3.5%. This suggests the market is still in an accumulation phase. Adler notes that panic-selling typically begins when the index surpasses 15%, reinforcing the idea that most market participants are quietly positioning themselves for a potential price surge

Consolidation Before the Next Move?

However, BTC’s current market action suggests a more cautious short-term outlook. At the time of writing, the world’s largest cryptocurrency by market capitalisation had fallen 1.3% in the previous 24 hours and was trading at $94,306, having fluctuated between intraday highs of $93,806 and lows of $95,741. 

It also fell 0.9% in the last week after rising 8.5% in the previous two weeks. In addition, the asset has increased by 13% in the last 30 days and is only 13% away from its all-time high. 

Nonetheless, concerns remain. As BTC approaches the psychological $100,000 barrier, which has historically been associated with aggressive distribution by long-term investors, experts are concerned about an inflow of supply. Glassnode warns that maintaining upward momentum from here will necessitate equally strong demand to offset any profit-taking. As May progresses, the main question is whether this is due to ongoing ETF inflows, corporate treasury purchases, or retail demand. 

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