Bitcoin’s Profitable Supply Drops: Signs of a Changing Market

- Understanding Bitcoin’s price movements has always been a challenge for investors. In addition to traditional technical analysis tools, on-chain data plays a crucial role in assessing the balance of supply and demand in the market, investor sentiment, and overall market dynamics.

- Recently, Bitcoin’s “Supply in Profit” has dropped, coupled with increased liquidity accumulation, providing insight into how the market might move in the future.

- “Supply in Profit” shows how much of the current Bitcoin supply is profitable based on the current price. However, there has been a significant drop in the profitable supply due to the recent Bitcoin price drop.

- This drop indicates that many investors are losing money, and those who are still in profit are reducing selling pressure, stabilizing the market. This could signal a potential reversal opportunity.

- Currently, Supply in Profit is approaching the Psychological Inflection Line on the chart. This area marks a level that is considered emotionally critical by investors, often used as a long-term support and resistance zone.

- If the price goes above this level, optimism increases; if it falls below it, selling pressure may emerge.

- In conclusion, we are approaching a critical level. If it is exceeded, it could be positive for Bitcoin price and a market recovery may follow.