Having a large portion of the supply in profit is not a bad thing, quite the opposite.
Of course, there are certain levels that are more "comfortable" than others, but generally, an increase in the supply in profit tends to fuel bullish phases.
Currently, the supply in profit has climbed back above 85%, which is fairly positive.
During the last correction, it dropped close to 75%, a relatively low level that aligns with the global average (bell curve), which is a critical threshold.
Falling below this level could trigger more profit-taking or even spark a capitulation event.
It’s also worth noting that during past cycles, the lowest supply in profit levels were around 45–50%, which corresponded to deep bear market conditions.
Historically, when the supply in profit surpassed the 90% threshold, it consistently triggered euphoric phases and we are now approaching that level
However, these euphoric phases can be short-lived and are often followed by short- to medium-term corrections.
Written by Darkfost
