Bitcoin Supply in Profit at 88% Signals Strong Market Support: Glassnode

Bitcoin (BTC) may be facing short-term volatility, but fresh on-chain data from Glassnode suggests a resilient foundation beneath the market’s surface.

Despite a recent pullback from its all-time high (ATH) of over $109,000, BTC has rebounded from its April lows near $75,000 to consolidate above $94,000, putting 88% of its circulating supply in profit.

Market Reset with Strong Fundamentals

Glassnode reported that Bitcoin’s Market Value to Realized Value (MVRV) ratio has cooled off to its long-term mean of 1.74. According to the analytics firm, historically, such a reset level often corresponds with phases of market consolidation, with the latest seen in an August 2022 drawdown where unrealized gains were similarly trimmed before another leg upward.

Meanwhile, the Realized Profit/Loss Ratio has gone above 1.0 again, pointing to a change in sentiment as traders move from underwater positions to take modest profits. Per Glassnode’s analysis, the development indicates that the market has enough liquidity and confidence to absorb the realized gains, which is an important sign of strength.

Macro indicators seem to agree, with analyst Axel Adler Jr indicating that the 30-day change in Bitcoin’s Composite Volatility Index remains at -3.5%, suggesting that the market is still in an accumulation phase. According to Adler, panic-selling phases usually emerge when the index climbs above 15%, further strengthening the notion that the majority of market participants are quietly positioning for a bigger price boost.

Consolidation Before the Next Move?

However, BTC’s current market movement paints a more tempered short-term picture. At the time of writing, the world’s largest cryptocurrency by market cap was down a slight 1.3% in the last 24 hours and was trading at $94,306 after oscillating between intraday opposites of $93,806 and $95,741.

It had also slipped 0.9% over the past week, but still remained up 8.5% across two weeks. Additionally, the asset has gained 13% in the last 30 days, and is also just 13% away from its ATH.

Still, risks remain. As BTC approaches the psychological $100,000 mark, a level linked with aggressive distribution by long-term holders in past cycles, observers are wary of a potential influx of supply. Glassnode warns that sustaining upward momentum from here will require equally strong demand to absorb any profit-taking.

Whether this comes from continued ETF inflows, corporate treasury buys, or retail interest remains the key question as May rolls along.