Bitcoin's Profitability Stays Strong Despite Price Swings

Bitcoin's Impressive Resilience: 91% of Supply Remains Profitable

Bitcoin's recent price fluctuations have tested the market, but data reveals a remarkable level of resilience. Despite sell-side pressure and a test of the $111K level, approximately 91% of the Bitcoin supply remains in profit. This suggests strong conviction among holders and a potentially healthy market structure.

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Unlike previous bear markets where nearly 50% of the Bitcoin supply was underwater, the current dip has resulted in only 9% of supply in loss. This highlights a significant difference compared to the market bottoms of 2015 and 2018.

This retracement appears to be more of a healthy reset within a broader uptrend, even with short-term indicators signaling selling pressure. The data suggests that the market is experiencing shallow realized losses and stronger holder conviction.

Spot Market Shows Selling Pressure

Analysis of Spot Taker Cumulative Volume Delta (CVD) data indicates dominant selling pressure from takers. Over the past 90 days, sell volume has outweighed buying activity, reflecting a cautious sentiment among short-term traders. These traders are reducing exposure after Bitcoin's rally, aiming to secure profits before volatility increases.

However, the impact of this selling pressure appears limited compared to previous, more significant drawdowns. This reinforces the idea that long-term holder resilience is providing a floor against sharp declines.

NVT Golden Cross Signals Potential Demand Weakness

The NVT Golden Cross, which measures transaction strength relative to Bitcoin's valuation, has decreased by 12.54%. This suggests weaker network activity compared to market value. Historically, declines in this metric have coincided with local tops or short-term consolidation periods.

Despite this decline, the current drop is moderate compared to past bearish phases, indicating that Bitcoin's fundamental strength remains intact. While reduced network efficiency might limit upward momentum, it doesn't necessarily signal a structural breakdown.

Liquidation Levels Suggest High Volatility Around $111K

Liquidation heatmaps from Binance reveal significant clusters of long positions near the $111K level. Should Bitcoin dip into this zone, cascading long liquidations could trigger substantial downside volatility. Simultaneously, a large concentration of short liquidations exists above current price levels, suggesting a potential upside squeeze if the price rebounds.

The market currently sits at a pivotal point where either direction carries substantial risk. Traders face a delicate balance, with both long and short exposures vulnerable to rapid unwinding. This highlights the significance of the $111K level in determining near-term price direction.

Bitcoin's Next Move: Breakout or Correction?

Bitcoin's current metrics present a mixed picture. While dominant taker sells and a weakening NVT Golden Cross indicate potential risks, strong holder resilience and clustered liquidations suggest possible sharp swings. It appears that Bitcoin is consolidating, potentially resetting before its next major move. The direction of this move depends on whether sell-side dominance continues or eases.

Currently, Bitcoin is in a balancing act, with both bullish and bearish scenarios remaining viable around the $111K level.