✒️The Supply in Profit indicator represents the percentage of the circulating supply of BTC that is in a profitable position. This analysis incorporates the long-term moving average (1,500 DMA) along with ±1 standard deviation (SD). The cycle period is approximately set to 4 years. The +1 SD is formed in the 85-95% range. If the Supply in Profit surpasses the +1 SD band, it is interpreted as being in a major bull market.
However, the indicator does not consistently stay above 90% even during bull markets. In the 2017 bull market, there were significant 🔴deep corrections observed. The three corrections when the Supply in Profit approached the 1,500 DMA were approximate -33.4%, -39.6%, and -40%. Similarly, in the 2021 bull market, there was a deep drop of -31% just before reaching the peak. During these deep corrections, the Supply in Profit was observed to find support around the 🟢+0.4 SD of the 1,500 DMA.
In the current cycle, a -23.4% correction occurred in early May, testing the +0.4 SD of the indicator. Additionally, in the past two weeks, there has been another -16% correction, bringing the indicator close to this level once again.
📌Compared to past cycles, it appears there are still at least two more months remaining in the major bull market phase. It is intriguing to see whether there will be another significant surge after this correction. If the Supply in Profit breaks below the +0.4 SD and approaches the 1,500 DMA, it may indicate the beginning of a bear market.
Written by Yonsei_dent
