Renowned analytical platform CryptoQuant recently shared data regarding Bitcoin Supply in Profit, which would ultimately contribute to understanding the market circumstances. This metric could be defined as the proportion of the current profitably circulating supply of BTC.
In a recent X post, the platform mentioned that using the long-term moving average, the 1,500 DMA, and the standard error ±1SD, CryptoQuant has identified certain patterns in the Bitcoin market, which correspond to an approximate four-year cycle.
Moreover, Supply in Profit analysis depicts that if the figure crosses the +1 SD band means 85-95%, then it points towards major bull market. However, it was identified that this indicator rarely remains above 90% in the historical periods , let alone during bearish market conditions.
For example, during the 2017 bull market run, the Supply in Profit under consideration went through deep corrections when rising toward the 1,500 DMA. Most of these reductions averaged about -33.4%, -39.6%, and -40%.
Bitcoin Corrections Mirror Past Trends
Likewise, the 2021 bull market has -31% decline before its peak, during its occurrence in the same year. The Supply in Profit was identified to have some backing from the +0.4 SD level of the 1,500 DMA in these deep corrections.
A notable -23.4% correction was done in the early days of May in the current cycle and brought the index to a test of +0.4 SD threshold. Another -16% correction recently again brought the indicator to this critical support level again. This cycle pattern is typical of the earlier ones, suggesting that the market could yet be in the bull phase.
CryptoQuant revealed that, relative to the previous period cycles, the now-established bull market phase could last at least two more months. This prediction raises an intriguing question within the Bitcoin community: Will there be another big increase after this correction? If the Supply in Profit falls below the +0.4 SD and the stock returns are close to 1,500 DMA, that is considered to be the start of a bear market.
Therefore, the Bitcoin community continuously awaits for the next market trend that could either recover or may be a start of the bear market. CryptoQuant’s analysis provides a factual outlook which makes the site helpful in dealing with the uncertainty that comes with investing in cryptocurrency.
Supply in Profit as presented by CryptoQuant gives a complete picture of the state of Bitcoin’s market. Thus, given the historical data and adhering to the current trends, investors are closely watching whether Bitcoin continue its bullish behavior or shift towards a bear market.
