Bitcoin Profitability Nears Danger Zone: Why 85% in the Green Could Trigger a Pullback
On-chain metrics indicate a significant majority of Bitcoin holders, over 85%, are currently holding their assets at a profit. This rising Bitcoin profitability level is prompting discussions about potential short-term market corrections driven by profit-taking.
Analysis of market data reveals the “supply in profit” indicator, tracking the percentage of BTC owners above their initial purchase price, has rebounded strongly after recently touching the 75% mark—a level historically viewed as significant support during previous market cycles.
While a high percentage of profitable supply often underpins bullish trends, market observers note a critical threshold exists. Historically, when this metric surpasses 90%, the market frequently enters a euphoric state, often followed by notable short- to medium-term price declines. The current level suggests the market is approaching this potentially volatile zone.
As of this writing, Bitcoin’s price is hovering between $94,000 and $95,000, showing signs of consolidation. Technical indicators present a mixed picture; the relative strength index (RSI) at 66 edges closer to overbought territory. While some metrics suggest potential trend exhaustion, others, like moving average convergence/divergence (MACD), still indicate bullish momentum.
Future price action hinges on buyer strength. A decisive move above the $98,000 resistance could pave the way for Bitcoin to challenge the $100,000 psychological barrier. Conversely, a failure to hold current levels and a break below $89,000 could trigger a slide towards the $85,000–$87,000 support range, a key area for those involved in cryptocurrency trading for beginners.
Beyond technical charts, significant institutional interest appears to be fueling the digital asset’s recent strength. Data indicates U.S. spot Bitcoin exchange-traded funds (ETFs), often accessed via the best crypto exchange platforms, attracted net inflows of $764 million over the past week.
Corporate accumulation is also evident. MicroStrategy recently added 15,355 BTC to its reserves for $1.4 billion, bringing its total holdings to over 553,000 BTC. Further institutional demand is anticipated, with Cantor Fitzgerald, SoftBank, Bitfinex, and Tether planning a $3.6 billion Bitcoin investment venture named 21 Capital.
Bitcoin’s trajectory may ultimately depend on whether this robust institutional demand can absorb potential selling pressure from retail holders looking to secure profits as the market approaches historically significant profitability levels.