Low Loss Supply & Profits Signal Bitcoin’s 11% Dip Reset
Bitcoin’s recent 11% dip may represent a healthy reset rather than capitulation, according to on-chain metrics. Despite a $943 million sell-off that pushed BTC under $110,000, net realized profit/loss (NRPL) surged to $4.2 billion, a one-month high. At around $110,000, only 9% of Bitcoin’s supply sits underwater with unrealized losses up to 10%, compared to over 25% and 23% in prior bear markets and more than 50% during full bear cycles. These low loss-supply signals, paired with strong net profits, indicate profit-taking instead of panic selling. Moreover, Bitcoin is poised for three consecutive daily gains to start September, a bullish setup last seen in early August when BTC rose from $113,000 to $124,000 in two weeks. Together, these key indicators support a healthy reset theory and point to sustained market conviction in Bitcoin’s near-term trajectory.
Bullish
Bitcoin’s low underwater supply—only 9% at unrealized losses—and a surge in net realized profit (NRPL) to $4.2 billion contrast sharply with past bearish capitulations, where loss supply exceeded 25% and NRPL turned negative. This divergence indicates investor conviction and profit-taking, reducing sell pressure and bolstering market stability. The potential for three consecutive daily closes above previous levels, a pattern last seen before August’s rally, further underscores bullish momentum. Historically, similar on-chain signals have preceded sustained uptrends, suggesting that this dip functions as a healthy reset. In the short term, traders may view the reset as a buying opportunity, while long-term holders can maintain confidence in Bitcoin’s structural strength. Collectively, these factors support a bullish market outlook.