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Bitcoin’s supply as a profit metric could hint that the current bear market has not yet been painful enough for the cyclical bottom to form.

Bitcoin supply in profit dropped to 45% after the crash

As one analyst pointed out in a CryptoQuant Publishall historical lows have occurred when the profit on the offer has fallen below 40%.

There “offer in profitis an indicator that measures the percentage of the total Bitcoin supply in circulation that is currently in profit.

This metric works by walking through each coin’s on-chain history to see what price it was last moved at. If that previous price for any coin was lower than the value of BTC right now, then that particular coin is generating profits at the moment.

The indicator takes the total of these coins and then gives the percentage based on the total number of coins in circulation. The opposite metric is the “loss supply” and it is simply calculated by subtracting the bid in profit from 100.

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Now, here is a chart that shows the trend of Bitcoin supply in profit over the past few years:

Bitcoin supply in profit

The value of the metric seems to have sharply dropped in recent days | Source: CryptoQuant

As you can see in the chart above, Bitcoin’s supply percentage in earnings has plunged recently due to the crash triggered by the collapse of crypto exchange FTX.

Following this fall, the indicator only has a value of 45%. This means that more than half of the total supply has now entered a loss state.

The chart also highlights the values ​​of the metric that have been seen during the lows of the previous two halving cycles.

It appears that less than 40% of Bitcoin’s supply made unrealized profits in these two bear market lows.

If the same pattern forms this time around as well, it would mean that the profit supply still needs to drop more than 5 units to reach historical lows.

Such a change in profitability can only take place after a further drop in the price, which implies that the pain is not yet over for Bitcoin investors.

BTC price

At the time of writing, the price of Bitcoin is hovering around $16,600, down 6% in the past week. Over the past month, the crypto has racked up 14% losses.

Bitcoin Price Chart

Looks like the price of the coin is still continuing its sideways movement | Source: BTCUSD on TradingView
Featured image from Hans-Jurgen Mager on Unsplash.com, charts from TradingView.com, CryptoQuant.com



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