Bitcoin is currently experiencing a rare phenomenon within its market cycle. Analysis from Glassnode indicates that a significant portion of the Bitcoin supply has been held in a profitable state for an extended period, now totaling 273 days consecutively. This is based on the price remaining consistently above the +1 standard deviation profit threshold.
This ongoing period of sustained profitability is the second-longest ever observed in Bitcoin’s history. It’s only surpassed by the 335-day stretch seen during the 2015-2018 bull market. The current run has already exceeded the 251-day period recorded in the 2020-2021 cycle.
Why it matters
The percentage of circulating Bitcoin that’s “in profit” is a vital indicator of the overall health of the market. It reveals the proportion of coins currently held at a price exceeding their original purchase cost. When a large majority of Bitcoin holders are in profit for a considerable duration, it reflects a robust confidence in the asset and potentially reduces the inclination to sell.
However, extended periods where most Bitcoin holders are profitable can also be a sign of an over-optimistic market, where traders may become overly confident or even euphoric.
Chart context
- 2015–2018 cycle: The profitability streak persisted for 335 days before the market reached its peak.
- 2020–2021 cycle: The profitability band was surpassed for 251 days, before experiencing a significant price drop.
- Current cycle: It’s currently at 273 days, demonstrating underlying strength but also nearing levels previously associated with market tops.
The chart illustrates how previous long-lasting profitability periods corresponded with major peaks in the Bitcoin market. This suggests that the current bull run could potentially still have further to climb before experiencing a correction.
The takeaway
Bitcoin’s capacity to maintain such a lengthy phase of profitability underscores the robust nature of this current upward trend relative to past cycles. Although it hasn’t yet reached the 2018 peak, the market is approaching levels that have historically preceded major turning points.
Market participants will be closely observing whether Bitcoin continues to extend its profitability run beyond its all-time high or if history will repeat itself with a subsequent cooling period.
