On-chain data shows that around 95% of Bitcoin holders are in profit following the asset’s latest price surge.
Very Few Bitcoin Addresses Remain Underwater
In a new post on X, market intelligence platform IntoTheBlock shared an update on the current state of Bitcoin holder returns. The analytics firm used on-chain data to determine this.
IntoTheBlock looked at the transaction history of each address on the network to check the average price at which they purchased their coins. Wallets with a cost basis lower than the current price are believed to have some net unrealized profit.
Likewise, addresses with the opposite type are considered loss holders. The analytics firm calls the former investors “in the money,” while the latter are “out of the money.”
Naturally, wallets whose average purchase price is equal to the latest spot price of the cryptocurrency will only break even on their investment. They will be considered “at the money”.
Here is how the addresses on the current Bitcoin network are distributed across these three categories:
As can be seen above, about 95% of current Bitcoin holders are currently in the black. The remaining 3% are at break-even, while the remaining 2% are underwater.
Therefore, the market distribution is currently skewed heavily towards profit holders. The reason behind this is the recent price surge of the asset.
“With 95% of Bitcoin addresses currently in profit, market sentiment is bullish,” IntoTheBlock noted. “Historically, such levels signal strong bullish momentum but can also indicate overextension.”
In general, profitable investors are more likely to sell their coins at any given time, so a large amount of profitable coins can increase the likelihood of a mass sell-off with profit-taking motive. This is why a high profit ratio can suggest potential overheating conditions.
Currently, a large number of addresses are in the money, so there is a possibility that another profit-taking event could occur. It remains to be seen whether demand is enough to absorb the selling or whether Bitcoin has topped out.
On a more optimistic note, Bitcoin inflows into “accumulation addresses” have spiked recently, as CryptoQuant community manager Maartunn pointed out in a post on X.
Accumulation addresses refer to wallets with no history of selling on the network. These long-time HODLers just added 56,700 BTC to their wallets, which could indicate that they may be starting another accumulation phase. At the time of writing, Bitcoin is trading at around $67,400, up more than 11% over the past week.
