Bitcoin's Profitability Plummets Amid Market Turmoil: What the Numbers Say
The Bitcoin market is navigating a precarious phase, with recent on-chain analysis revealing a significant contraction in the supply of BTC held in profit. This downturn, triggered by the latest crypto market crash, is drawing parallels to historical patterns that preceded further price corrections, raising concerns among investors.
Sharp Decline in Bitcoin Profit Supply Signifies Market Stress
According to a detailed report from on-chain analytics platform Glassnode, Bitcoin's supply in profit has sharply declined to approximately 85%, leaving a notable 15% of the total supply at a loss. This trend typically emerges after Bitcoin's price breaks down from new all-time highs (ATHs) and settles around short-term holders' cost basis—a scenario currently unfolding. Glassnode highlights this as a "pivotal phase," where the market rigorously tests the conviction of investors who acquired Bitcoin near recent price peaks. This pattern is reportedly playing out for the third time in the current market cycle, suggesting a critical juncture. Analysts warn that if Bitcoin fails to reclaim and hold above the crucial $113,000 threshold, a deeper market contraction could follow, plunging an even larger portion of the supply into an unprofitable state.
Critical Price Levels and Looming Consolidation
Bitcoin is presently struggling to maintain its position above the 0.85 quantile, currently pegged around $108,600. Historically, a failure to defend this level has been a clear indicator of structural market weakness, often preceding more severe corrections that push the price towards the 0.75 quantile, which now aligns near $97,500. Should this support fail, Bitcoin risks falling below the $100,000 mark for the first time since May. From a broader macroeconomic perspective, the persistent "demand exhaustion" evident in the market suggests that Bitcoin may require an extended period of consolidation to rebuild its foundational strength and prepare for future growth.
Whale Activity and Long-Term Holder Behavior Intensify Selling Pressure
Further exacerbating the current market fragility, long-term Bitcoin holders have significantly increased their selling activity. The 30-day Simple Moving Average (SMA) of their spend volume has surged dramatically from a baseline of 10,000 BTC to over 22,000 BTC daily since the market's peak in July. This sustained distribution indicates widespread profit-taking by seasoned investors, directly contributing to Bitcoin's current weakness. Moreover, recent observations of whale movements, including a substantial transfer of 3,003 BTC to Binance—likely for selling—and a massive $227 million short position against Bitcoin, underscore the intense selling pressure that continues to weigh on the digital asset. As of writing, Bitcoin is trading around $108,800, showing minor gains in the last 24 hours but remaining in a highly uncertain position.
