Bitcoin is trading near $77,381, with 68% of its circulating supply currently in profit, according to Glassnode. That is three percentage points higher than when the cryptocurrency traded at the same level in May, creating an estimated 600,000 BTC of additional potentially profitable supply worth about $47bn at current prices.
That supply could be sold for a gain before Bitcoin reaches its next major resistance area.
The short-term holder cost basis – the average price paid by recent buyers – is now close to $71,000. It has been reset lower after several months of trading within the June-to-August range, meaning investors who bought during that period are already sitting on gains.
Those purchases helped establish a floor during Bitcoin’s earlier decline, but also created a larger group of holders with profits to protect as the market attempts to move higher.
Glassnode’s latest report points to a significant concentration of long-term holder supply between $83,000 and $86,000. Previous research by the firm estimated the size of that band at about 1.05 million BTC.
The coins are held by investors who remained in the market throughout the full downturn without selling. If Bitcoin returns to that range, those holders would reach break-even for the first time since the correction began.
Bitcoin therefore faces two potential waves of selling as it rises. The first could come from more recent buyers who are already in profit near the current price. The second may emerge higher up, when long-term holders approach their break-even levels.
Any coins held at a profit represent possible supply. Bitcoin will need sufficient new demand to absorb both groups if either begins selling into a rally.
ETF flows and wider market pressures
US-traded spot Bitcoin ETFs attracted an average of $290m a day over seven days during August’s rally, providing genuine capital that helped push Bitcoin towards $80,000.
However, trading turnover in the secondary market for those ETFs remained closer to $3bn a day. Glassnode described that level as well below the volumes seen during previous expansionary phases.
The firm said the rally still needed the broader trading participation normally associated with a durable move higher.
US spot Bitcoin ETFs recorded about $236m in outflows this week, led mainly by IBIT, as Bitcoin fell back towards $77,000. The outflows provide an early test of whether ETF demand can continue absorbing available supply now that the amount of profitable Bitcoin has increased.
The Treasury’s 19 August buyback announcement briefly pulled the 10-year yield towards 4.6%, contributing to the conditions that helped start Bitcoin’s move higher.
Eight trading sessions later, the yield had returned to about 4.8%, removing that support. Brent crude has since settled near $95.63 as fighting between the US and Iran resumes.
A worldwide sell-off in bonds has pushed sovereign yields higher, while futures markets now indicate roughly a two-thirds chance of a US Federal Reserve rate increase in September. Higher bond yields and oil prices make it more difficult for new buyers to absorb Bitcoin supply already sitting in profit.
Several market events could shape the next move. The August jobs report is due on 4 September, followed by the consumer price index on 11 September and the Federal Reserve’s meeting on 15-16 September.
A quarterly options expiry will then take place on 25 September. About $14bn of open interest is spread across Deribit and IBIT, with a significant proportion of positions concentrated above $80,000.
Bitcoin enters that period with more profitable supply above its current price than it had the last time it traded at this level.
In the bullish scenario, weaker jobs data and easing inflation would reduce expectations of a Federal Reserve rate increase. A return to positive ETF flows could then help Bitcoin close above the $83,000-$86,000 long-term holder supply band.
If that happens, the market could absorb the profit-taking pressure and move towards the upper end of the options-implied range, near $89,700. September’s four tests would then be viewed as confirmation of the move.
The bearish scenario would involve stronger employment or inflation data reinforcing expectations of a rate increase, while continued ETF outflows encourage recent buyers to protect their gains rather than commit fresh capital.
Bitcoin could then fall below the $71,000 short-term holder cost basis and test Glassnode’s deeper accumulation zone between $62,000 and $65,000. Investors who bought during the summer and helped stabilise the market could become sellers into any recovery.
Bitcoin is up 2.04% over the past 24 hours and remains the world’s largest cryptocurrency by market capitalisation, ranked number one.
The report was written by Gino Matos, a law school graduate and journalist with six years of experience in the crypto industry, whose work focuses mainly on the Brazilian blockchain sector, and Liam Wright, also known as “Akiba”. Wright is a reporter, podcast producer and Editor-in-Chief at CryptoSlate.
CryptoSlate says it may use artificial intelligence tools to support research, editing and production, but that its journalism remains human-led and overseen by its editorial team. The publication says its writers’ views are their own and do not represent CryptoSlate, and that the material is not investment advice or an endorsement of any project.
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