Bitcoin's Fragile Recovery: 71% Supply in Profit Not Enough for Sustained Bull Run
Bitcoin currently finds itself at a pivotal juncture, grappling with renewed volatility and an unstable price around the $90,000 mark. While bulls strive to defend this critical psychological level, market confidence remains notably fragile. Analysts suggest that the short-term sentiment is dominated by uncertainty, leading many traders to perceive every price rebound as a potential trap rather than the precursor to a confirmed market recovery.
The Critical "Supply in Profit" Metric
A key indicator under scrutiny is the "supply in profit" metric, which currently stands at 71%. According to leading analyst Darkfost, this level is insufficient to foster a sustainable bullish continuation. For a healthier market foundation, a broader base of investors holding profitable positions is essential. Historically, Bitcoin tends to sustain bull conditions when the "supply in profit" metric remains above 75%, as this generally translates to less selling pressure and greater resilience to market dips. However, when this metric climbs too high, typically exceeding 95% to 100%, unrealized gains can become "overhead supply," potentially triggering corrective phases as investors opt to take profits.
Volatility and the Path Forward
The recent price action underscores the market's precarious state. Bitcoin previously surged to a major peak around $125,000 before a sharp sell-off in November, finding a temporary floor in the mid-$80,000s. This significant drop fractured previous momentum, ushering in a lower price range where reclaiming former support levels has proven challenging. Despite a rebound, Bitcoin has settled into a consolidation phase, repeatedly testing resistance between $92,000 and $95,000 without achieving sustained upward movement. Each rally has been met with selling pressure, indicating persistent short-term supply. Market volume also reflects this uncertainty, showing higher activity during sell-offs and muted participation during attempted recoveries. For a genuine recovery, bulls must decisively hold the $88,000-$90,000 range and convincingly reclaim the $92,000 level.
