Bitcoin Supply in Profit Hits New High as Leverage and Institutional Demand Build

Bitcoin's price may be flat, but beneath the surface, various indicators are pointing to an increasing risk of a sharp move in either direction. According to Glassnode's weekly pulse, the percentage of circulating Bitcoin supply that is now in profit has reached 69.3%, surpassing its statistical high band.

This rising profitability across the supply is not the only concern. The Net Unrealized Profit and Loss reading climbed to 10.1%, while the Realized Profit and Loss ratio jumped 39% to 1.0, indicating that more participants are actively locking in gains rather than holding through the flat price action.

Moreover, Glassnode's Hot Capital Share figure, which measures how much price-sensitive short-term capital is active in the network, increased from 27.5% to 30.1%, well above its upper band of 22.8%. This surge in reactive money sitting in Bitcoin, combined with elevated profitability across the supply, historically raises the risk of a sharp move once a catalyst arrives.

Furthermore, derivatives data shows that futures open interest rose 1% to $37.1 billion, pushing above its upper statistical band, and options open interest climbed to $40.1 billion, above its own upper band. However, the volatility spread is widening to -20.87%, well below its lower band, suggesting traders are not pricing in the risk of a sudden sharp move.

Lastly, Glassnode reported that U.S. spot Bitcoin ETF net inflows surged 175% to $681.2 million from $247.8 million the prior week, pointing to a re-acceleration of institutional demand even as overall ETF trading volume fell 19.2% to $12.1 billion.

The setup leans toward upside exposure but carries rising positioning risk if a catalyst forces a move in either direction.