BTC supply in profit nears 45%, raising capitulation risk

The percentage of Bitcoin supply in profit is nearing 45%, a level that mirrors past market stress phases, according to an analysis by CryptoQuant contributor CryptoZeno. He noted that this threshold historically marked a point where many holders saw unrealized gains turn into losses, signaling that recent price weakness is spreading throughout the network. While profitability above 90% has been associated with strong upward momentum, the 45% level has frequently appeared during late-cycle corrections amid growing pessimism. CryptoZeno explained that a significant amount of BTC is already below its purchase price and that overheated expectations have cooled. This period is characterized by short-term holders selling to long-term investors as losses mount. While this increases short-term volatility, he views it as a process that strengthens the market's long-term structure. However, he cautioned that this single indicator cannot definitively identify a market bottom. The 45% level is a zone where the risk of capitulation selling and the opportunity for long-term accumulation both increase, CryptoZeno added, advising a close watch on holder behavior over the next few weeks.