Bitcoin Jump Above $25k Sends 2.7M More Coins Into Profits
On-chain data shows that around 2.7 million coins entered a profit state following Bitcoin’s jump above the $25,000 level.
65% of Bitcoin Adjusted Supply is now in the green
According to data from on-chain analytics firm glassnode, an additional 20% of the adjusted supply is now enjoying profits. The relevant indicator here is the “percentage of bid to profit”. As its name implies, it measures the percentage of the total Bitcoin supply currently in circulation with unrealized gains.
The metric works by traversing the on-chain history of each coin in the circulating supply to see what price it was last moved to. If this previous value for any currency is less than the most recent Bitcoin price, that currency will be accounted for in profit.
There is a problem with this indicator, however, and that is that a large amount of dormant supplies have been lost because the wallets that store these coins are no longer accessible.
That old offering was last moved at very low prices compared to what BTC is worth today, so technically it is holding a huge unrealized profit. But as these coins are lost, they are essentially out of circulating supply and therefore should not influence the current market.
For this reason, the bid-on-profit indicator can gradually become inaccurate compared to the real picture. To mitigate this issue, Glassnode created the “percentage of bid adjusted to profit” metric, a modified version of the original indicator that filters data for all coins older than 7 years.
Now, here is a graph that shows how the value of this Bitcoin indicator has changed over the past week:
Looks like the value of the metric has observed some rise in recent days | Source: Glassnode on Twitter
As displayed in the chart above, Bitcoin’s adjusted percentage supply in profit was around a 45% value just a few days ago, when the price was fluctuating around the $20,000 level. This means that 45% of the offer with less than 7 years had some gain at this point.
Since then, BTC has enjoyed strong upward momentum and even briefly crossed the $26,000 mark before seeing a pullback to the current $25,000 level.
As a result of this rapid growth, the adjusted supply in profit also saw a huge jump to around 65%, which means that 20% of the adjusted supply or 2.7 million coins have entered a profit state now.
A natural implication is that investors bought 20% of the adjusted supply at prices in the $20,000 to $26,000 range.
BTC price
At the time of writing, Bitcoin is trading around $25,100, up 13% over the past week.
The price of the asset seems to have seen some pullback since the high earlier today | Source: BTCUSD on TradingView
Featured Image of Kanchanara from Unsplash.com, Charts from TradingView.com, Glassnode.com