Short-term holder supply in profit is a metric that measures the percentage of coins held for fewer than 155 days whose last on-chain movement occurred at a price below the current spot. These coins are considered the most mobile and can indicate near-term selling pressure. When the percentage of profitable short-term supply is high, it suggests that a larger share of speculative wallets sits on gains that can be quickly realized. Conversely, when this percentage collapses, it indicates that the same cohort is underwater and may become more price-sensitive to the downside.
At the beginning of the year, 54.76% of short-term supply was in profit, with Bitcoin trading near $94,400. A two-week rally in January pushed the share of profitable short-term supply to 95% as the spot rate peaked above $104,000. However, this euphoric reading proved to be short-lived. By February 20, after a $5,800 retracement, profitable short-term supply fell to 67.82%. The real capitulation came in April when tariff headlines triggered a cross-asset risk aversion, leading Bitcoin to slide from $82,500 to $78,400, and short-term coin profitability plummeted to a YTD low of 2.07%.
Despite the volatility experienced by short-term holders, long-term holders have remained profitable throughout the year, with their supply remaining at 100% profitability through the first quarter and 99.90% even after the April drawdown. This contrast highlights that recent volatility is primarily driven by traders who entered the market near the cycle top, with longer-term holders still enjoying significant gains compared to the current spot price.
The fluctuations in short-term holder supply closely mirror Bitcoin’s spot price movements. When the price reached its year-to-date high, almost every coin bought since the ETF approval rally was profitable. However, during market stress, more than 90% of these coins moved underwater. These swings are significant as short-term holders are responsible for the majority of intraday sell pressure during corrections, and historical patterns suggest that steep drops like the one seen in April often precede localized price bottoms.
The collapse in short-term holder profitability has had two immediate effects. First, it eliminates a significant portion of latent supply, as wallets in losses are less likely to sell in the market, leading to a thinner offer depth when the profitability metric drops. Secondly, it sets a ceiling for the market, as price increases towards the cost basis for coins bought in February and March may trigger selling from previously underwater wallets, creating overhead resistance. This reflexive zone requires new external demand to absorb the flow before significant upside potential can be realized.
The near-perfect profitability of long-term supply is attributed to the strong inflows into spot ETFs, with coins custodied at an average acquisition price between $55,000 and $75,000. The structural supply scarcity created by this ETF-driven migration of coins into the long-term cohort has helped maintain the profitability ratio close to 100%, even as the spot price corrects. This reinforces Bitcoin’s bullish bias and suggests a strong foundation for the cryptocurrency’s future growth amidst market uncertainties.
