BTC Recovery Falters Amid Continued Long-Term Holder Losses

Bitcoin investors are showing signs of profit as nearly 60% of the BTC supply is now in profit, but on-chain data suggests it's too early to confirm a new bull market.

CryptoQuant reports that Bitcoin supply profitability has improved significantly since June, when the figure was at a low near 46%. As of July 22, over 57.5% of the BTC supply is in profit.

However, long-term holder on-chain losses continue to dominate, which is a caveat for a bullish recovery. The spent output profit ratio (SOPR) of long-term holders, which measures coins moving on-chain at a higher price relative to their previous transaction, remains below the threshold required to confirm a market recovery.

According to CryptoQuant, previous bear markets have only ended when both supply in profit and LTH-SOPR meet specific requirements. The 30-day simple moving average (SMA) of LTH-SOPR should remain above 1 without falling below that level for weeks on end, while total supply in profit should be above 64%. However, since the last failed attempt from April 28 to June 1, the 30-day SMA of LTH-SOPR has been below 1 for over 50 days.