The Bitcoin supply in profit has seen a sharp decline amid the latest . This has raised concerns that BTC could suffer a further crash, as holders who are in the red may move to offload their coins. 

Bitcoin Supply In Profit Drops Amid Market Crash

On-chain analytics platform Glassnode revealed in that the Bitcoin supply in profit has historically dropped to around 85%, with 15% of the supply sitting at a loss. This has occurred whenever the BTC price breaks down from a new all-time high (ATH) and trades around the cost basis, as is happening now. 

Glassnode noted that this marks a pivotal phase for Bitcoin, as this is where the market tests the conviction of investors who had bought near . This pattern is said to be playing out for the third time in this current cycle. The on-chain analytics platform warned that if BTC fails to recover above the $113,100 range, a deeper contraction could send a larger share of the Bitcoin supply into loss. 

Glassnode further stated that this deeper contraction could amplify the stress among recent , which could set the stage for a broader capitulation across the market. The platform also alluded to the Supply Quantile Cost Basis to explain why it is essential for BTC to reclaim the short-term holders’ cost basis above $113,000. 

Bitcoin is said to be struggling to hold above the 0.85 quantile at $108,600. Failure to hold this has historically indicated structural market weakness and often preceded deeper corrections toward the 0.75 quantile, which now aligns near $97,500. This puts below $100,000 for the first time since May. 

A Longer Consolidation Phase May Be Necessary

Glassnode stated that from a macro perspective, the repeated demand exhaustion suggests that Bitcoin may require a longer to rebuild strength. This exhaustion is said to be clearer with the Long-Term Holder Spend Volume. These long-term holders have increased their spending with the 30D-SMA rising from the 10,000 BTC baseline to over 22,000 BTC daily since the market peak in July. 

Glassnode noted that such persistent distribution indicates , which has contributed to the current Bitcoin weakness. Bitcoin OGs have continued to offload their coins at an unprecedented rate, putting significant selling pressure on BTC. that a particular whale moved 3,003 BTC to Binance, likely in a bid to sell, while also shorting BTC with a position worth $227 million.

At the time of writing, the Bitcoin price is trading at around $108,800, up in the last 24 hours, according to from CoinMarketCap.