BTC Supply in Profit Nears 60%, but Analysts Warn Recovery Could Reverse
Bitcoin investors are seeing improved profitability as nearly 60% of the cryptocurrency's circulating supply moves back into profit. However, on-chain analysis suggests the recovery remains fragile and could reverse if key market indicators fail to maintain their upward t…
Intelligence analysis by Llama
Despite the recovery, analysts caution that the current rebound does not yet confirm the beginning of a new bull market. Key indicators being monitored include the Long-Term Holder Spent Output Profit Ratio (LTH-SOPR) and supply in profit.
Imagine you bought a toy for $10, but now it's worth $15. That's kind of like what's happening with Bitcoin. More people are selling their Bitcoin for a profit, which is a good sign. However, some experts think this might not last, and the price could go back down.
Analysis
A $60B Vote of Confidence
The recent recovery in Bitcoin's supply in profit has been a welcome development for investors. According to CryptoQuant, the metric has climbed to 57.5% on July 22, up sharply from the 2026 low of 46.2% recorded on June 30. This indicates that a growing share of BTC holders are now holding coins worth more than their acquisition price. However, analysts caution that the current rebound does not yet confirm the beginning of a new bull market.
Why Cursor?
One of the key indicators being monitored is the Long-Term Holder Spent Output Profit Ratio (LTH-SOPR). The metric tracks whether long-term holders are generally moving their Bitcoin at a profit or loss. A value above 1 indicates that coins are predominantly being spent at a profit, while a reading below 1 can signal selling at a loss or capitulation. CryptoQuant contributor thechessONCHAIN noted that previous Bitcoin bear-market recoveries have generally required both supply in profit to remain above 64% and the 30-day moving average of LTH-SOPR to stay above 1 for an extended period. The current cycle has already seen one failed recovery attempt.
The Road Ahead
The 30-day average of LTH-SOPR has also remained below 1 for more than 50 days, highlighting continued pressure among long-term Bitcoin holders. Bitcoin's broader investment picture also remains mixed. Supply in loss crossed the 50% threshold in June, a level that has historically appeared near the final stages of major Bitcoin market bottoms. At the same time, weak spot-market demand has been offset to some extent by renewed institutional interest in Bitcoin. For now, the improving supply profitability provides a positive signal, but analysts believe Bitcoin needs sustained strength in key on-chain metrics before a durable market recovery can be confirmed.
Key points
- Bitcoin's supply in profit has climbed to 57.5% on July 22, up from 46.2% on June 30.
- Analysts caution that the current rebound does not yet confirm the beginning of a new bull market.
- The Long-Term Holder Spent Output Profit Ratio (LTH-SOPR) is being monitored as a key indicator of the market's health.
- Supply in loss crossed the 50% threshold in June, a level that has historically appeared near the final stages of major Bitcoin market bottoms.
If the current recovery continues, Bitcoin could see sustained growth, with more investors buying in and driving up the price. This could lead to a new bull market, with Bitcoin reaching new highs.
However, if key market indicators fail to maintain their upward trend, the recovery could reverse, and Bitcoin's price could drop. This could lead to a prolonged bear market, with investors losing money.
