During the recent cryptocurrency market downturn, on-chain data reveals that Bitcoin's Supply in Profit has significantly declined.

Bitcoin Supply in Profit Drops to About 81% Amid Recent Crash

As explained in a CryptoQuant Quicktake analysis, the recent downturn in Bitcoin's price has resulted in a portion of its circulating supply moving into unrealized losses.

The key metric here is the "Supply in Profit," which tracks the percentage of Bitcoin currently held in wallets that last moved at a price higher than the current market price, indicating unrealized profits. This metric is calculated by analyzing each coin's transaction history to determine its cost basis relative to the current market value.

Conversely, the "Supply in Loss" represents the remaining percentage of coins where the last transaction occurred at a price lower than the current market price. Together, these metrics total 100% of the circulating Bitcoin supply.

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The chart depicting the trend of these indicators over recent years shows a noticeable decline in the Bitcoin Supply in Profit during the recent market downturn.

At its lowest point during this crash, when Bitcoin briefly dipped below $60,000, the Supply in Profit fell to around 81%, while the Supply in Loss correspondingly rose to 19%.

The analyst noted that if prices continue to decline, the percentage of Bitcoin in profit could further decrease to the range of 70-76%. This shift is significant because investors holding Bitcoin in profit are more likely to sell, potentially leading to increased selling pressure in the market.

While the current level of Supply in Profit remains relatively high, a decrease in this metric could actually be beneficial for Bitcoin by reducing the potential for mass sell-offs.

As Bitcoin's price has rebounded slightly above $61,000 from its recent lows, monitoring these indicators will be crucial to understanding potential market movements in the near term.