# Supply in Profit

## Supply in Profit Indicator

The Supply in Profit is an on-chain metric that measures the proportion of the total circulating supply that is currently held at a profit compared to the acquisition price. This indicator provides insights into overall market sentiment, confidence levels, and potential sell pressure across both short-term and long-term holders.

## Steps to Use the Supply in Profit Metric

1\. Understand the Concept:

* Supply in Profit: The share of the circulating supply where the current market price is higher than the cost basis (last moved price) of those coins.
* Relevance: Reflects the extent of unrealized gains across the network, helping identify periods of optimism, strong conviction, or profit-taking risk.

2\. Interpret the Supply in Profit Metric:

* High Supply in Profit: Indicates widespread unrealized gains, often associated with bullish phases, strong sentiment, and higher investor confidence — but also increased profit-taking risk.
* Low Supply in Profit: Suggests fewer holders are in profit, typically reflecting bearish phases or market corrections.
* Rapid Increases: Occur during rallies, as more holders’ coins move into profitable territory.
* Sharp Declines: Seen during market downturns, when coins fall back into loss.

3\. Analyze Historical Patterns:

* Bull Market Peaks: Supply in profit often reaches extremely high levels near cycle tops, coinciding with euphoria and heavy profit-taking.
* Bear Market Bottoms: Low levels of supply in profit align with widespread losses and weak sentiment.
* Recovery Phases: Rising supply in profit marks a shift toward renewed confidence and healthier network conditions.

4\. Make Decisions:

* During Rallies: Sustained high levels of supply in profit can confirm bullish momentum but may also signal heightened risk of distribution.
* At Market Bottoms: Very low supply in profit may reflect capitulation zones and potential accumulation opportunities.
* In Transitional Phases: Rapid shifts between profit and loss supply often precede increased volatility and trend changes.

## Tips:

* Pair with Supply in Loss: Together, these metrics provide a complete view of network profitability and sentiment.
* Context Matters: High profitability in early bull markets often reflects healthy adoption, while in late cycles it can indicate overheated conditions.
* Track Extremes: Extreme readings (very high or very low) often align with cycle inflection points.
* Combine with Holder Breakdown: Analyzing profits among short-term vs long-term holders clarifies where sell pressure may emerge.
* Use with Price Trends: Overlay supply in profit with market price to confirm or question ongoing trend strength.

## Created By The Supply in Profit indicator is a widely recognized on-chain tool.


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