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.