On-chain data shows around 95% of all Bitcoin holders are making profits following the recent bullish action seen by the asset price.
Very few Bitcoin Addresses are still underwater
In a new post on X, market intelligence platform IntoTheBlock shared an update on how Bitcoin owner profitability currently looks. The analytics company used on-chain data to determine this.
IntoTheBlock went through the transaction history of each address in the network to check the average value of its coins. Wallets with a cost base below current value are thought to hold some unrealized benefit.
Similarly, addresses of the opposite type are considered loss holders. The analytics firm calls the former investors “in the money,” and the latter “out of money.”
Naturally, wallets that have their average acquisition value equal to the value of the latest cryptocurrency can break even on their investment. They will be called “money.”
Now, here is how the distribution of addresses in the Bitcoin network is the same now in all three categories:
As can be seen above, about 95% of the current Bitcoin owners are very profitable. About 3% of the rest is at rest, and another 2% is under water.
Therefore, the market distribution is currently heavily biased towards the profit holders. The reason for this is the recent price rally that the stock has gone through.
“With 95% of Bitcoin addresses now profitable, the market is growing,” notes IntoTheBlock. “Historically, such levels have indicated strong bullish momentum but can also indicate potential upside.”
In general, profit investors are more likely to sell their coins at any given time, so a large number of them in the green can raise the possibility of a mass selloff with the intention of taking profits. That’s why a high gain ratio can suggest potential overheating conditions.
A large number of addresses are currently in the money, so another profit-taking event is likely to occur. It remains to be seen if the demand will be enough to absorb the sale or if a higher price is possible for Bitcoin.
On a more positive note, Bitcoin’s entry into “hoarding addresses” has increased recently, as CryptoQuant’s community manager Maartunn pointed out in an X post.
Accumulation addresses refer to wallets that have no transaction history on the network. These endless HODLers just added a whopping 56,700 BTC to their wallets, which may suggest that they may be starting another phase of accumulation.
BTC price
At the time of writing, Bitcoin is trading around $67,400, up more than 11% over the past week.