Bitcoin has been consolidating in a small range. It is trading just below $115,000, while maintaining key support at $110,000. The current consolidation is a reflection of the tug-of war between the bulls and the bears as the volatility pushes the market both ways. The recent price action indicates that, despite temporary stability, the selling pressure gained an edge. This has left traders apprehensive about the market’s next move.
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Darkfost, a top analyst in the field of blockchain technology, has brought to light an important development on-chain that gives context to the current phase. Using his data, the amount of Bitcoin in profit now reaches a critical historical threshold. This indicator, which measures how much of Bitcoin’s supply is now above its cost base, has served as a guide for years to determine the major phases of a cycle. Although a high share of Bitcoins in profit does not necessarily indicate a bearish market, the history shows such peaks often correspond with key turning points.
The market is at a critical moment with BTC consolidating and the profit supply reaching its peak. Investors’ reactions to the recent price drop could decide whether Bitcoin gains momentum over $115K, or suffers a more severe correction. signal.
Bitcoin supply in profit reaches critical cycle zone
Darkfost, a leading analyst in the Bitcoin space, believes that current levels of Bitcoin profits are more complex than what many people think. Darkfost believes that some investors mistakenly interpret the large number of coins at profit as an indication of a negative outlook. emphasizes It is a crucial component to Bitcoin’s cycle. According to him, this isn’t what most people think. “a high percentage of supply in profit is what fuels the euphoric waves that drive the market forward.”
If we look at the history of Bitcoin, a bell curve defining its performance from inception shows that Bitcoin has averaged a profit of 75% over time. Across cycles, roughly three quarters of Bitcoin’s supply are in profit. When this ratio climbs above 90%, it usually signals a period of strong bullish momentum — the kind often seen in major bull markets. As confidence grows and money flows in, such elevated levels provide a psychological background for rallying.
Darkfost warns, however, that the metric is also a good indicator of turning points. When the profit percentage drops to below 90% the market usually enters a correction phase. The pullbacks can last a short time or be prolonged, but the change from euphoria is marked by the breach below this line.
Bitcoin’s proximity to this threshold underscores the stakes. Markets could move higher if profit supply remains high. In the absence of this, the likelihood of a more severe correction increases, highlighting the significance of the metric in defining the cycle.
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Bulls struggle to regain momentum after pulling back
Bitcoin’s price is now near $112900 following a bounce from $110800 lows, however, the chart indicates that momentum has not been restored. Following the rejection at $123,000 earlier this month, BTC entered a corrective phase, slipping below both the 50-day and 100-day moving averages, which now act as resistance near $115,700–$116,600. The bulls need to take back this zone if the want to reverse the trend.
BTC is stabilizing after the recent volatility thanks to the 200-day moving avg. at $111600. It is important to hold this area in order to prevent a further retracement towards the $108,000 range. This level could be held by buyers while they build momentum. A relief rally towards the mid-$115K area is possible.
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BTC will be more vulnerable to continued downside pressure, if the moving-averages are not reclaimed. Inability to maintain above $115K is already a sign of fading power. Without a clear breakout, the sellers may regain control. Bitcoin currently sits between critical resistance and support, in an intermediate phase.
Chart from TradingView, Featured Image from Dall E
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Source: www.newsbtc.com
