Bitcoin holders are seeing a return to overall profitability, according to on-chain analytics, but the data also points to a familiar risk: the market may be setting up for another “false breakout” before a sustained recovery is confirmed.
CryptoQuant data cited by contributor thechessONCHAIN shows the share of Bitcoin supply currently trading above its approximate acquisition price—known as Supply in Profit—has climbed to 57.5% as of July 22. That compares with 46.2% on June 30, the platform’s reference point for a 2026 low. While that improvement is significant, CryptoQuant’s framework suggests investors should look for confirmation beyond a single rebound.
Key takeaways
- Supply in Profit has risen to 57.5% (July 22), up from 46.2% (June 30), indicating more coins are moving in profit.
- CryptoQuant says prior bear-market endings have required supply strength plus long-term holder SOPR staying in a healthy range.
- LTH-SOPR remains a key checkpoint: CryptoQuant’s conditions include a 30-day SMA staying above 1.
- CryptoQuant highlights that the cycle has already produced one failed attempt at improvement earlier in the year.
Supply in Profit rebounds toward 60%
On-chain analytics platforms track investor cost basis implicitly by looking at the conditions under which coins were last active. In this case, CryptoQuant’s Supply in Profit (%) measures the portion of Bitcoin worth more than its acquisition price. When that percentage rises, it generally implies that a larger share of the supply is back to being held at unrealized gains.
According to CryptoQuant, the metric climbed above the 50% mark in July. In the same summary, thechessONCHAIN pinpointed the move to 57.5% by July 22, following a low of 46.2% on June 30. The speed of the recovery matters: shifting from the mid-40s to the upper-50s less than a month later suggests the market’s repricing has been sharp.
That said, CryptoQuant’s contributor stresses that a sustained bull-market recovery typically requires these improvements to hold—especially when viewed together with long-term holder behavior.
Why long-term holder SOPR is still the gatekeeper
As Supply in Profit improves, CryptoQuant also expects other indicators tied to realized pressure to follow. One such measure is long-term holder SOPR (LTH-SOPR), which compares the sale price of long-dormant coins to their last transaction price.
In CryptoQuant’s framework, long-term holders are entities whose Bitcoin has remained dormant for at least six months. SOPR interprets whether LTH coins are moving at profit on-chain: values above 1 indicate LTH coins are typically being spent at higher prices than their prior transaction, while values below 1 suggest movement at a loss.
CryptoQuant argues that bear markets have not fully ended in previous cycles unless both of the following conditions align:
- The 30-day simple moving average (SMA) of LTH-SOPR should remain above 1.
- Total Supply in Profit should stay above 64%.
This combination matters because Supply in Profit can rise simply as market prices recover, but it doesn’t always guarantee that long-term holders are structurally comfortable spending into strength. If LTH-SOPR stalls or falls back below 1, it can suggest lingering caution or recurring distribution behavior from older holdings.
Potential for another “failed attempt”
CryptoQuant’s analysis includes a warning based on historical pattern recognition: the current cycle already produced a rebound that looked convincing at the time, only to roll back later.
As described by thechessONCHAIN, from April 28 to June 1 the 30-day SMA of LTH-SOPR held above 1.0 for about 35 days, while Supply in Profit reached 67%. Yet both metrics ultimately reversed, implying the market’s improvement didn’t hold long enough to qualify as a confirmed transition.
Since then, the platform notes that the 30-day SMA of LTH-SOPR has been below 1 for more than 50 days. That detail is important for investors because it means the recent Supply in Profit rebound has not yet been matched by the same level of long-term holder spending profitability implied by CryptoQuant’s “recovery” requirements.
The immediate takeaway is not that the market is bearish, but that the on-chain evidence is incomplete. A rise toward 60% in Supply in Profit can set the stage for healthier conditions, but CryptoQuant’s criteria suggest traders should be cautious about interpreting the move as confirmation of a sustained bull phase.
Broader market signals: bottom timing vs. demand uncertainty
Earlier coverage from Cointelegraph noted that Bitcoin supply in loss crossing above or past certain thresholds has historically been used to estimate where bear-market bottoms might be forming. That aligns with CryptoQuant’s perspective on why profitability metrics matter: supply transitions from loss to profit tend to coincide with turning-point behavior in prior cycles.
In that earlier context, Cointelegraph described how the supply-in-loss threshold historically preceded a “countdown” toward cycle bottoms. While that doesn’t guarantee a repeat this time, it helps explain why the current move in Supply in Profit is drawing attention.
However, demand signals remain mixed in the surrounding market narrative. Cointelegraph previously pointed to weak spot-market interest in the near term, juxtaposed with a rebound in institutional activity via Bitcoin exchange-traded products. In particular, Cointelegraph referenced weak spot-market interest alongside improving institutional BTC allocation as ETF flows turned into a short-term inflow streak.
For investors, the asymmetry matters: even when profitability metrics improve quickly, insufficient fresh demand can make breakouts fragile. Conversely, if institutional allocation continues while long-term holder SOPR stabilizes above 1, the combination could be more supportive of a durable recovery.
What to watch next
CryptoQuant’s framework implies the next checkpoint is whether LTH-SOPR keeps its momentum—specifically whether the 30-day SMA remains above 1 and whether Supply in Profit can move beyond and hold above 64%. Until those conditions align, Bitcoin’s shift back into aggregate profitability may be best viewed as a promising step that still needs confirmation.
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