The Bitcoin market continues to face downward pressure, with its price falling to around $61,000. This crisis pushes a growing share of circulating supply out of profit territory. Analysts now suggest the market could be approaching a historic profitability reset.
Offer in profit contracts
Data from CryptoQuant, shared by analyst CryptoZone, shows that the percentage of Bitcoin supply held in profit is falling towards the 45% mark. Historically, this level has been a hot spot. This often appears during periods of intense market stress, where large numbers of holders move from unrealized gains to unrealized losses.
The analyst noted that this drop signals a widespread impact of recent price weakness. It’s not just a small group of holders who feel the effects. Changing profitability indicators offer clues about the balance between fear, capitulation and potential opportunity.
Looking at previous cycles, profitability levels above 90% were linked to strong uptrends and widespread confidence. When the metric drops to 45%, this usually happens during late corrections. The feeling becomes more and more pessimistic at this point.
A process of redistribution
As weaker holders abandon their positions under pressure, coins gradually move toward investors with longer time horizons. This redistribution process can lead to short-term volatility. But in past cycles, it has helped build healthier market structures over time.
The measure near the 45% level is worth watching closely. No single indicator can accurately determine the bottom of the market. However, previous cycles suggest that profitability results in this range often coincide with elevated risk of capitulation and the emergence of long-term accumulation opportunities.
Currently, the data paints a picture of a market in the midst of a reset, rather than one driven by euphoria. Analyst Ted Pillows noted that Bitcoin features decent liquidity clusters on both sides. On the upside, there is short-term liquidity around $64,000 to $66,500. On the other hand, long-term liquidity is between $58,000 and $60,000. Despite the significant drop, new long positions are still open, suggesting some traders continue to bet on a rebound.
