Recent on-chain data reveals the current percentage of the entire Bitcoin userbase that is still in profit following the latest price crash of the asset.
Bitcoin Addresses Holding Net Gains
In a recent post on X, the market intelligence platform IntoTheBlock discusses the profit-loss status of Bitcoin investors after the recent crash in the cryptocurrency’s value.
The key metric of interest here is the “Historical In/Out of the Money,” which uses on-chain data to analyze the percentage breakdown of addresses on the network that are either holding profits or losses.
This metric determines the profitability status of addresses by examining each address’s transaction history to compare the average purchase price with the current spot value of the asset. Addresses with a lower cost basis than the current price are considered to be in profit, while those with a higher cost basis are underwater.
IntoTheBlock categorizes addresses with a profit as “in the money” and addresses with a loss as “out of the money.” Addresses with a cost basis matching the current price are considered to be “at the money.”
Below is a chart shared by the analytics firm showing the trend in the Historical In/Out of the Money since the beginning of the year:
The chart illustrates a decrease in the percentage of addresses holding profits recently | Source: IntoTheBlock on X
The graph indicates that a large number of Bitcoin addresses have been in profit throughout the year due to the price rally of the cryptocurrency. However, the recent crash to the $50,000 level has caused a significant number of investors to incur losses. Currently, around 75% of the user base is in profit, which translates to 39 million addresses.
Historically, Bitcoin has tended to reach bottoms when holder profitability is low. This trend is observed as investors in profit are more likely to sell their coins, potentially triggering a mass selloff. Conversely, a decrease in profitability reduces the risk of selling for profit-taking purposes, making it easier for the asset to rebound.
While 75% profitability is not considered low, during bullish periods, it has been sufficient to signal potential market bottoms. It remains to be seen if the current Bitcoin profitability will result in a similar turnaround as seen in January or if further market fluctuations are on the horizon.
Current BTC Price
As of now, Bitcoin is trading around $50,100, marking a decrease of over 28% in the past week.
The recent price trend shows a downward movement | Source: BTCUSD on TradingView
Featured image from Dall-E, IntoTheBlock.com, chart from TradingView.com
