Bitcoin Profit Metric Hits 50%—Will a 655% Rally Follow?

• Bitcoin's total supply in profit dropped to 50.8% in early February, hitting a level historically associated with significant market accumulation phases.
• Past cycles show that when profitability dips toward the 50% threshold, massive rallies often follow, including a 655% surge after the January 2023 low.
• The market structure has shifted with institutional entities and spot ETFs now controlling roughly 15.8% of the total circulating supply.

Historical Profitability and Market Cycles

As of this week, the total Bitcoin supply in profit is hovering around 60.6%. This follows a significant dip on February 5, when the metric fell to 50.8%, its lowest point since January 2, 2023. Historically, this 50% to 60% range has acted as a reset for market cycles, where many holders find themselves at a breakeven point, reducing the motivation to sell.

Data from previous years highlights the potential for recovery from these levels. In March 2020, when profitability fell below 50%, Bitcoin was priced at $6,500 before climbing to $69,000 in 2021. Similarly, the 51% profitability mark in January 2023 saw Bitcoin trade at $16,682 before eventually rallying 655% to reach $126,000 in 2025.

Shift in Long-Term Holder Behavior

While overall profitability has decreased, the behavior of long-term holders (LTH) remains distinct from previous bear markets. In 2015, 2018, and 2022, price bottoms were marked by the LTH-NUPL (Net Unrealized Profit/Loss) turning negative. Currently, however, the LTH-NUPL stands near 0.40, indicating that long-term investors remain in a profitable position despite broader market volatility.

A primary factor in this divergence is the increased presence of corporate and institutional buyers. Approximately 3,319,677 BTC, or 15.8% of the supply, is now held by spot ETFs and corporate treasuries. These participants are generally less reactive to short-term price fluctuations, which may prevent the forced selling typically seen in historical capitulation phases.

Analytics and Reduced Selling Pressure

Market indicators suggest a cooling of reactive selling. Analyst Darkfost noted that short-term holder flows to Binance plummeted to 25,000 BTC on March 25, a sharp decline from the 100,000 BTC seen during the February sell-off. This suggests that newer participants are becoming less inclined to exit their positions during price dips.

Furthermore, analyst GugaOnChain points to several valuation models that define current market stress levels. Historically, periods where the MVRV ratio is below 1, NUPL is under -0.2, and the Puell Multiple is near 0.35 have signaled deeply undervalued conditions. While these metrics do not guarantee an immediate price bottom, they identify zones where the risk of further downside is historically limited compared to long-term upside potential.