67% of Bitcoin Supply Still in Profit Despite 27% Drop from $125K Peak
Bitcoin has fallen roughly 27% from its October all-time high near $125,000 to about $90,000, but on-chain metrics show 67% of circulating BTC remains above holders’ acquisition price. Adler Asset Management’s ‘supply-in-profit’ indicator — the share of Bitcoin trading above purchase cost — remains above the critical 50% threshold associated with market capitulation. The metric hit 46% at the 2023 bottom and exceeded 90% at prior market tops; current readings resemble early-2022 correction conditions rather than a full-blown bear market. The peak drawdown reached ~35% before recovering to ~27.6%, and short-term moving averages have begun to turn upward, suggesting a potential local base. Analysts warn that a drop below 50% profitable supply could accelerate downside risk, while remaining above 50% signals only moderate bearish pressure. Relevant market flows: spot BTC ETFs recorded net inflows (~2.41k BTC, $223.5m) in the prior 24 hours. Primary keywords: Bitcoin, supply-in-profit, drawdown, spot ETFs. Secondary/semantic keywords included: market structure, capitulation threshold, on-chain metrics, short-term moving averages.
Neutral
The news points to a neutral-to-moderately bearish market stance. Key supportive facts: 67% of BTC supply remains profitable, the supply-in-profit indicator is above the 50% capitulation threshold, drawdown has recovered from a 35% peak to ~27.6%, and short-term moving averages are turning up — all signs that selling pressure is present but not dominant. Historical parallels: during the 2023 bottom the supply-in-profit fell under 50% (46%), marking deep capitulation and a bear phase; conversely, readings above 90% preceded market tops. The current mid-range reading (67%) resembles early-2022 correction conditions where markets consolidated rather than collapsed. For traders: in the short term this suggests limited downside unless on-chain profit share slips under 50% or macro/liquidity shocks occur. Expect choppy, range-bound price action with bounces as buyers defend levels and occasional spikes on ETF inflows or news. In the event of a breach below 50% profitable supply, algorithmic and stop-loss selling could amplify declines and shift the outlook to clearly bearish. Longer term, sustained ETF inflows and re-accumulation above key moving averages would support a bullish resumption; failure to hold current support and deterioration in on-chain indicators would prolong consolidation or deepen the bear trend.