Long-Term-Supply in Profit

Long-Term Holder Supply in Profit Indicator

The Long-Term Holder (LTH) Supply in Profit is an on-chain metric that measures the total amount of coins held by long-term holders that is currently valued above their acquisition cost. It provides insights into the profitability, sentiment, and potential distribution behavior of long-term investors. This metric is particularly useful for identifying periods of strong market confidence and potential profit-taking.

Steps to Use the Long-Term Holder Supply in Profit Metric

1. Understand the Concept

• LTH Supply in Profit: The total supply of cryptocurrency held by long-term holders whose current market value is higher than their realized value (the price at which the coins were last moved).

• Relevance: Highlights periods where long-term holders are in profit, offering insights into market sentiment, confidence, and potential distribution phases.

2. Interpret the LTH Supply in Profit Metric

• Rising LTH Supply in Profit: Indicates increasing profitability for long-term holders, typically observed during bull markets or recovery phases.

• Declining LTH Supply in Profit: Suggests reducing profitability, often seen during price corrections or bear markets.

• Stable LTH Supply in Profit: Reflects consistent market conditions, indicating equilibrium and steady long-term holder sentiment.

3. Analyze Historical Patterns

• Bull Markets: High LTH Supply in Profit values align with periods of significant price appreciation, reflecting widespread profitability and bullish sentiment.

• Bear Markets: Declining LTH Supply in Profit values indicate reduced profitability, often aligning with capitulation phases and bearish sentiment.

• Accumulation Phases: Moderate and stable LTH Supply in Profit values often signal strategic accumulation by long-term holders.

4. Make Decisions

• During Bull Markets: Monitor rising LTH Supply in Profit values as a confirmation of strong market confidence and demand, but be cautious of potential profit-taking at elevated levels.

• During Bear Markets: Use declining LTH Supply in Profit values to gauge long-term holder sentiment and potential support levels.

• During Neutral Markets: Observe stable values to assess market equilibrium and prepare for breakout opportunities.

Tips:

• Combine with Other Metrics:

Use LTH Supply in Profit alongside metrics like Long-Term Holder Supply in Loss, MVRV Ratio, and Reserve Risk to gain a comprehensive understanding of market sentiment.

• Identify Distribution Phases:

High LTH Supply in Profit values during bull markets signal potential profit-taking by long-term holders, which can precede price corrections.

• Compare Historical Trends:

Analyze LTH Supply in Profit trends across previous market cycles to identify recurring patterns and align strategies with historical data.

• Gauge Holder Confidence:

Rising LTH Supply in Profit reflects strong confidence in the asset’s performance, while declines may indicate growing caution or market stress.

• Track Recovery Phases:

Increasing LTH Supply in Profit values during price recoveries signal improving sentiment and potential bullish continuation.

How to Use the Indicator Effectively

• During Market Rallies: High LTH Supply in Profit values reflect widespread profitability among long-term holders, signaling strong confidence and potential continuation of bullish trends.

• During Market Corrections: Declining LTH Supply in Profit values indicate reduced profitability and growing caution, often aligning with bearish phases or market bottoms.

• During Consolidation Phases: Stable LTH Supply in Profit values reflect market equilibrium, providing a foundation for long-term planning and positioning.

Created By: This indicator is a widely recognized tool in blockchain analytics.