Bitcoin has recovered sharply over the past three weeks, and the share of coins back in profit has risen significantly.
Meanwhile, new CryptoQuant analysis suggests the market still has not reached the conditions that historically marked the end of bear markets.
Bitcoin Supply in Profit Rises to 57.5%
According to CryptoQuant author thechessONCHAIN, Bitcoin’s Supply in Profit—the percentage of $BTC worth more than its acquisition price—rose to 57.5% as of July 22. That is up from 46.2% on June 30, the cycle low.
The increase means more than one in every 10 BTCs moved from a loss to a profit in about three weeks. Over the same period, Bitcoin’s price gained roughly 7% and traded near $65,100.
Meanwhile, the Short-Term Holder Spent Output Profit Ratio (SOPR) stood at 0.9997. This suggests recent buyers are mostly selling at break-even instead of taking meaningful profits or losses.
Historical Bear Market Exits Required Higher Profit Levels
Despite the improvement, the analyst said Bitcoin has not yet reached the levels that historically confirmed the end of bear markets.
Using the 30-day average Long-Term Holder SOPR reclaiming 1.0 as the regime-change signal, previous bear markets ended only after a much larger share of Bitcoin’s supply returned to profit:
- April 2012: 69% of supply in profit
- November 2015: 64%
- May 2019: 83%
- April 2023: 77%
In each case, at least 64% of Bitcoin’s supply was back in profit. The current reading is 57.5%.
The analyst also pointed to a failed recovery earlier in the current cycle. Between April 28 and June 1, the Long-Term Holder SOPR stayed above 1.0 for 35 consecutive days. During that period, Supply in Profit climbed to 67%. Both metrics later reversed lower.
The 30-day average Long-Term Holder SOPR has now fallen to 0.86. It has remained below 1.0 for 51 consecutive days, suggesting long-term holders are still not consistently realizing profits.
Selling Pressure Shifts to Newer Holders
The report also examined the source of current selling pressure. Bitcoin held for more than six months accounted for 12% to 16% of exchange inflows in early July as prices rebounded.
This suggested long-term holders were taking advantage of the rally to sell. That share has since dropped sharply to 0.8%, down from 5.6% a month earlier. The decline suggests selling by older holders has largely faded.
Instead, the remaining overhead supply comes from investors who accumulated Bitcoin between one month and two years ago. According to the analysis, their average acquisition prices range from about $72,000 to $101,000. That leaves many of these holders still underwater at current prices.
The analyst concluded that Bitcoin’s Supply in Profit would likely need to climb into the mid-60% range and remain there for longer than the failed 35-day recovery earlier this year.
Until then, the current rally is more likely to be a recovery within an ongoing bear market than confirmation of a market-cycle bottom.
