Less than 45% of Bitcoin's active supply is now in profit, according to CryptoQuant analyst Darkfost. "Active" means coins that moved in the last 10 years. In early October the same metric was around 60%.
I build models of economic processes, and I read this one differently from most headlines:
1. It isn't a signal separate from price. Every coin carries the price at which it last moved. Supply in profit is today's price run through that cost distribution. A drop from ~60% to under 45% in about six weeks shows how much supply was bought above the current price, not what comes next.
2. The 10-year cut is a good modelling choice. Old coins, many likely lost, sit in "profit" forever and make the market look healthier than it is.
3. "Below 40% marked the lows" rests on a handful of cycles. With a sample that small, it's context, not a trigger.
What I'd watch instead: do coins in loss actually move to exchanges, or just sit?
Do you use supply in profit in your analysis, or is it price in disguise?
#BitcoinActiveSupplyInProfitDropsBelow45% #OnChain $BTC
I build models of economic processes, and I read this one differently from most headlines:
1. It isn't a signal separate from price. Every coin carries the price at which it last moved. Supply in profit is today's price run through that cost distribution. A drop from ~60% to under 45% in about six weeks shows how much supply was bought above the current price, not what comes next.
2. The 10-year cut is a good modelling choice. Old coins, many likely lost, sit in "profit" forever and make the market look healthier than it is.
3. "Below 40% marked the lows" rests on a handful of cycles. With a sample that small, it's context, not a trigger.
What I'd watch instead: do coins in loss actually move to exchanges, or just sit?
Do you use supply in profit in your analysis, or is it price in disguise?
#BitcoinActiveSupplyInProfitDropsBelow45% #OnChain $BTC