Remember that sickening feeling when Bitcoin sliced through $100k on the way down last month? Yeah, me too. I was staring at the charts at 3 a.m., coffee gone cold, wondering if we were finally rolling over into the crypto winter everyone had been fear-mongering about.
Fast forward to today: BTC sits around $90,300, roughly 27% below the glorious $125,000 top we printed in October. The headlines are screaming “correction” and the comment sections are full of paper hands crying capitulation. But here’s the thing that actually made me pause and lean back in my chair – 67% of all Bitcoin supply is still in profit. That little on-chain metric just refuses to roll over and die.
Why Supply in Profit Actually Matters More Than Price
Price is loud. On-chain data is quiet, but way more honest.
Think about it this way: every single satoshi out there was bought by someone at some price. When the market price is above that average cost basis, holders are “in profit.” When it drops below, they’re underwater. History shows that when less than 50% of supply is in profit, panic tends to really kick in – people who bought near the top finally throw in the towel and we get those nasty capitulation wicks.
We saw it in 2018 (down to 43%), we saw it in 2022 (down to 46%), and we even saw it briefly in March 2020. Every single time the market touched or breached that 50% line, it marked the emotional bottom – even if price still had a little lower to go.
Right now? We’re chilling at 67%. That’s not euphoric 95% territory we saw at the absolute tops, but it’s miles away from despair territory either.
Comparing Today to Previous Major Corrections
Let me put some meat on those bones.
- Early 2022: BTC fell from $69k → $33k (52% drawdown). Supply in profit dropped from 100% → eventually 54% before the final leg down.
- Nov 2021 – May 2022 consolidation phase: supply in profit hovered 70-80% while price chopped sideways for months.
- Current cycle: $125k → $90k (27% drop so far) and supply in profit only fell from ~94% to 67%.
In other words, holders are taking this drawdown remarkably well. The average Bitcoin that’s moving today was bought below $54,000 (that’s the realized price right now). Which means even at $90k, most people who actually transact are still up 65% or more.
The Psychology Behind the 50% Line
There’s something almost primal about that halfway mark.
When more than half the supply is underwater, the narrative flips from “healthy correction” to “we’re in a bear market.” Social media turns toxic, weak hands puke, and leveraged players get rekt in cascading liquidations. But when two-thirds of holders are still green? The mood stays surprisingly calm. People are annoyed, sure. But they’re not desperate.
“As long as realized profit stays above 50%, the path of least resistance remains sideways-to-up rather than a free-fall.”
— Common observation among on-chain analysts
Short-Term Holders vs Long-Term Holders – Who’s Really Selling?
One of the most fascinating splits right now is between short-term holders (coins moved in the last 155 days) and long-term holders.
Short-term holder realized price is currently sitting around $98,000. That means anyone who bought after mid-July is underwater right now. They’re the ones feeling the pain – and yes, they’ve been distributing a bit. But long-term holders? Their cost basis is still sub-$30k on average. They’re barely blinking.
I’ve found that when long-term holders refuse to sell into weakness, corrections tend to be relatively shallow and quick. We’re seeing exactly that behavior right now.
Spot ETF Flows Are Still Positive – That’s Huge
Another quiet bullish signal hiding in plain sight: U.S. spot Bitcoin ETFs recorded another $223 million net inflow in the last 24 hours alone. That’s over 2,400 BTC scooped up while price was sliding.
Institutions aren’t panic-selling. They’re treating this dip exactly like the dozen other 20-30% corrections we’ve seen since January 2024 – as buying opportunities. In previous cycles we didn’t have this constant bid from regulated entities. Now we do. That changes the game.
Technical Signs a Local Bottom Might Be Forming
Let’s zoom into the shorter timeframes for a second.
The weekly realized price drawdown peaked at 35% in late November and has since recovered to 27.6%. More importantly, the 1-week and 2-week moving averages of price have started curling upward again. That’s usually the first baby step toward a new range or higher low.
- 200-day moving average still rising
- Pi Cycle top indicator nowhere near triggered
- Hash ribbons just flashed buy signal two weeks ago
- Mayer Multiple at 1.3 – historically cheap zone
None of these are guarantees, of course. But they’re the same cluster of signals we saw at the $50k-$60k range earlier this year before the run to $125k.
What Would Actually Change the Picture?
Look, I’m not here to shill mindless hopium. There is a line in the sand.
If Bitcoin keeps grinding lower and supply in profit drops below 58-55%, I’ll get nervous. Below 50%? That’s when I start moving to cash and preparing for a proper bear phase. We’re nowhere near that yet, but it’s worth watching like a hawk.
Other things that would flip me bearish:
- Sustained ETF outflows for weeks
- Long-term holders starting to distribute heavily
- Realized price breaking below $70k
- Global liquidity conditions tightening dramatically (watch DXY and Fed policy)
None of those are happening right now. In fact, most point the other way.
The Bottom Line – Still Constructive
Here’s where I land personally: this feels much more like the mid-cycle corrections of 2021 (April-July) than the beginning of a multi-year bear market.
Price is down 27%. Emotions are frayed. But the underlying holder behavior, the on-chain health metrics, and the institutional flows all say the same thing – most participants still believe the bull market has legs.
That can change, of course. Markets love humiliating the crowd. But until that 50% profit line is seriously threatened, I’m treating this as noise within a larger uptrend rather than the trend reversing.
Stay vigilant, manage risk, and maybe use these dips to accumulate if you’ve been waiting on the sidelines. Because if history suggests that when 67% of supply is still in profit, the path of least resistance has historically been higher – eventually.
(All data current as of December 11, 2025. This is not financial advice – just one trader’s perspective on the current on-chain landscape.)
