Bitcoin is still a very profitable asset for most of its holders, even with recent price swings. The most recent data indicates that only 16.66% of Bitcoin’s supply is currently losing money, while roughly 83.34% is making money. This suggests that even though the price of Bitcoin has dropped by 20%, most investors are still holding at a profit, elevating worries about the cryptocurrency’s long-term sustainability.
According to historical patterns, preserving market confidence is largely dependent on Bitcoin’s profitability. Although the percentage of supply held at a loss has occasionally increased due to short-term corrections, these stages have usually come before times of recovery. The fact that the profitable supply percentage is still much higher now than it was during earlier bear market downturns supports the claim that Bitcoin is still in a strong position.
Bitcoin is currently struggling to break out of its range, trading in a sideways channel between $92,500 and $100,000. The 200-day moving average is still a crucial support level, and the relative strength index (RSI) for Bitcoin indicates neutral momentum, which indicates that neither buyers nor sellers currently control the entire market.
The fact that the price decline of Bitcoin has not resulted in a significant increase in supply in loss is a crucial conclusion, indicating that the majority of long-term holders have not been unscathed. This contrasts sharply with previous cycles, in which panic-selling was triggered by corrections. The fact that a sizable amount of Bitcoin’s supply is still profitable indicates that despite recent volatility on the downside, investors are not in a rush to sell their holdings.
Concerns regarding a significant correction or mass sell-off are currently unfounded in light of Bitcoin’s profitability metrics. In the past, Bitcoin has experienced much more significant declines before entering long-term upward trends. A significant capitulation event is less likely because the market is in a healthier state than it was during previous downturns, with a high percentage of supply in profit.
The overall health of the Bitcoin market seems stable despite the fact that its short-term price action is still erratic. The fact that more than 80% of the supply of Bitcoin is still profitable indicates that there is not a serious risk of immediate declines in the asset. As long as Bitcoin maintains investor confidence and holds key support levels, the long-term bullish outlook will continue to hold.
