June 5th 2025



Summary

  • 📊 Bitcoin supply trends: Ben talked about the "supply in profit and loss" chart, which shows the percentage of Bitcoin supply held at a profit or loss. Historically, long-term holders eventually end up in profit if they hold through market cycles.

  • 🔻 Market cycle bottoms and metric crossovers: When the percentage of supply in profit and in loss intersect, it often marks major market bottoms—as seen in 2011, 2014, 2018, 2020, and 2022.

  • 📈 Use of 30-day SMA: Applying a 30-day moving average (SMA) reveals that levels above 90% often precede price pullbacks. This metric can act as an early warning signal for weakening momentum.

  • ⬆️ Recent data insights: In March 2024 and December 2024, the SMA peaked around 97–98%. As of now, it's at 96.71%, indicating that while strength remains, a pullback might be near, especially approaching Q3.

  • 🕰️ Cyclic patterns and timing: The speaker forecasts strength continuing into early to mid-June, with possible pullbacks around August–September, in line with prior cycles.

  • 🔄 Investor psychology & market sentiment: The chart is praised for illustrating cycles of greed and fear, as when supply in profit is high, greed dominates, and when it’s low, fear takes over.

Insights Based on Numbers

  • 🔹 96.71% of Bitcoin supply currently in profit – nearing a historical threshold where price corrections are likely.

  • 🔹 Past peaks at 97–100% have correlated with major pullbacks.

  • 🔹 30-day SMA serves as a reliable gauge to spot potential market exhaustion or strength continuation.


Understanding Bitcoin's Supply in Profit and Loss

Bitcoin's market dynamics can be complex, but certain metrics offer powerful insights into investor behavior and market cycles. One such key indicator is the "Supply in Profit and Loss" metric, which visually tracks how much of the Bitcoin supply is held at a profit or loss at any given time. In this article, we unpack how this metric works and how it can be used to anticipate major market movements.



The Core Concept: Supply in Profit and Loss

The Supply in Profit and Loss chart reflects the percentage of Bitcoin supply currently sitting at a profit versus a loss. It's calculated by comparing the current price of Bitcoin to the price at which each Bitcoin was last moved (suggesting when it was last bought).

  • Profit: Bitcoins whose last transaction occurred at a lower price than the current one.

  • Loss: Bitcoins whose last transaction occurred at a higher price than the current one.

This simple comparison forms the basis for understanding the broader market mood—whether it leans toward optimism (profit) or pessimism (loss).

Market Bottoms and Crossovers

Historically, significant market bottoms tend to appear when the supply in profit and loss lines cross. These crossover points indicate mass capitulation and are followed by major rebounds. These critical events occurred in:

  • 2011

  • 2014

  • 2018

  • March 2020

  • End of 2022

Such repeated patterns highlight the metric's reliability as a bottom-detection tool.

Predicting Pullbacks with 30-Day SMA

While tops are harder to predict, applying a 30-day Simple Moving Average (SMA) to the supply-in-profit curve helps pinpoint zones of market saturation. When this SMA exceeds 90%—and especially when it nears 97–100%—Bitcoin tends to face resistance, often leading to price pullbacks.

Examples from past cycles:

  • 2013: Double top structure after breaching 99%.

  • 2021: Peaks near 97–98% led to subsequent corrections.

  • 2024: As of March and December, SMA touched 97% and 98%, currently sitting at 96.71%.

Short-Term Outlook & Long-Term Trends

The speaker expects the market to maintain strength into mid-June 2025, followed by a potential pullback in Q3—possibly around August or September. This view aligns with past cycle behaviors.

If the SMA falls to around 77%, that could mark the next accumulation zone before the market surges again in Q4.

Emotional Cycles and Investor Sentiment

The chart also encapsulates the psychological ebbs and flows of the market:

  • Greed dominates when nearly everyone is in profit.

  • Fear arises when a large portion holds assets at a loss.

Understanding these emotional undercurrents is critical for timing entry and exit points.

Conclusion

The Bitcoin Supply in Profit and Loss metric, especially when paired with a 30-day SMA, serves as a valuable compass for navigating Bitcoin's cyclical nature. By watching for key thresholds and crossovers, investors can better anticipate both bullish rallies and corrective phases.

Source: Benjamin Cowen on YouTube @intothecryptoverse Summarized and Analyzed @Yung Herb

Link to the Video: https://youtu.be/Is7v_45oxoM?si=DUT7nI_toiAfytRz


#BTC #Market_Update #MyCOSTrade