follow report In Glassnode’s latest weekly newspaper, the total supply of profitable Bitcoin has dropped to just 85% this week, meaning that 15% of the supply is currently at a loss.
“Profit percentage of supply” is an indicator of the proportion of the total supply that is currently profitable.
This indicator works by seeing what price each of these coins was last moved at. If the price is below the current price, the coin is considered profitable. If the price is higher, the coin is considered lost.
If the return percentage of the supply hits above 95%, the bitcoin market high could appear soon. But if the value of the indicator is below 5%, a bottom can be formed instead.
Currently, the following graph shows the development of the return value of the Bitcoin supply over the past year:
It looks like only 85% of the BTC supply is profitable right now | Source: Glassnode
As the graph above shows, the percentage return on supply has fallen dramatically over the past week as Bitcoin price has fallen. Currently around 15% of the total supply is at a loss.
The report mentions that the 85% -90% zone can be viewed as a “bullish and bearish transition zone”. There have been two cases when the indicator entered this zone.
The first was when the Bitcoin crash happened in May and the second coincided with the crash on the day El Salvador accepted Bitcoin as legal tender. The report notes that the 85% zone is enough to push Bitcoin price down if it does not see a higher value within a reasonable time frame, similar to what has happened in the past.
At the time of writing, Bitcoin price is hovering around $ 56,800, down 6% over the past seven days.
Bitcoin price has fallen in the past few days | Source: TradingView
For the past week, Bitcoin has consolidated for the most part below the $ 60,000 price mark. At the moment it’s unclear when it will be able to rebound, but if the rate of return on the supply has an impact, Bitcoin could fall even further in the coming sessions.
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Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
According to NewsBTC