Bulletpoints:
• The 30-day Exponential Moving Average of the number of Bitcoins that are “in profit” hit a 2-month high on the 19th of January.
• 66.9% of Bitcoins were in profit on Thursday the 19th of January, up from around 50% at the turn of the year.
• Macro trend shifts in the volume of Supply in Profit can signal when a heavy concentration of investor cost basis has recently transitioned between unrealized profit, or loss.
The cryptocurrency market has seen a surge in Bitcoin prices since the start of 2021 and the latest Bitcoin rally has seen the world’s largest cryptocurrency by market capitalization regain the $21,000 level. This surge has been accompanied by a rise in the number of bitcoins that are “in profit” – that is, those that were acquired at a time when the BTC price was lower.
On the 19th of January, the 30-day Exponential Moving Average (EMA) of the number of Bitcoins that are “in profit” hit a 2-month high. According to crypto data and on-chain analytics firm Glassnode, the Supply in Profit Trend is now positive. This means that during positive market trends, the volume of BTC supply that was acquired at lower prices tends to increase, putting more supply into an unrealized profit.
In addition, Glassnode’s data shows that 66.9% of Bitcoins were in profit on Thursday the 19th of January, up from around 50% at the turn of the year. This means that around 12.9 million Bitcoins last moved when the price was lower. Macro trend shifts in the volume of Supply in Profit can signal when a heavy concentration of investor cost basis has recently transitioned between unrealized profit, or loss, providing further evidence of a bullish market.
The latest surge in Bitcoin prices and the rising number of BTCs that are “in profit” is an indication of investor confidence in the cryptocurrency market. This could lead to further gains in the near future, although investors should always be aware of the risks associated with investing in any asset.